India’s gems and jewellery sector to get huge export boost under India-UAE FTA

India’s domestic gems and jewellery sector will get a huge export boost in the United Arab Emirates (UAE) market as it would get duty-free access there, while the gulf nation will get greater access to the gold market here as India will give duty concessions on import of up to 200 tonnes, Union Commerce Secretary B V R Subrahmanyam said.

India has agreed to concessional import duties on gold imports of up to 200 tonnes per year. India imported about 70 tonnes of gold from the UAE in 2020-21.

“We are a major importer of gold. India imports about 800 tonnes of gold every year. In this particular agreement, we have given them (UAE) a TRQ (tariff rate quota) of 200 tonnes where the tariff (or import duty) in perpetuity will be one per cent less than whatever is the tariff charged for the rest of the world. Therefore, the UAE has a one per cent price advantage in gold bars. That one per cent tariff difference means those 200 tonnes will be diverted to the UAE,” the secretary told reporters.

He said the biggest gain for India is “that we get zero duty access” to the UAE market for domestic jewellery. There was a five per cent duty on Indian jewellery and now, “it’s gone to zero”, so the gem and jewellery sector is “gung-ho”, he added.

TRQ is a quota for a volume of imports that enter India at specified tariffs. After the quota is reached, a higher tariff applies on additional imports. TRQ would also be there for copper, polyethylene and polypropylene. To protect sensitive sectors, India has kept certain segments out of the ambit of this agreement. These include dairy, fruits, vegetables, cereals, tea, coffee, sugar, food preparation, tobacco, petroleum waxes, coke, dyes, soaps, natural rubber, tyres, footwears, processed marbles, toys, plastics, scrap of aluminium and copper, medical devices, TV pictures, auto and auto components and sectors under the production-linked incentive scheme.

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