India clamps down on 'misuse' by gold importers - UAE jewellers react

Dubai: Imports of gold into India will continue to flow smoothly from the UAE under the CEPA rules – the only thing that changes is there will be restrictions of alloys containing gold, according to leading jewellers in the UAE.

“There had been cases of Indian importers misusing the CEPA import rules by shipping in semi-finished alloys that contain gold,” said Abdul Salam K. P., Vice-Chairman of Malabar Gold & Diamonds. “It’s a good thing that the Indian government has stepped in to stop this practice.

“This was not what CEPA deal between UAE and India had envisioned.”

Under CEPA, India can import 180 tonnes of bullion from the UAE at an import duty of 5% compared to 6% from all other sources. The CEPA deal - which went into effect May 1, 2022 – represented a major transformation of the trade and investment flows between the countries.

Under the agreement, the UAE would emerge as one of the top suppliers of bullion to India, which is the second biggest consumer of gold after China.

According to market sources, the UAE is already the top supplier of the precious yellow metal to India, going past London and Switzerland.

Other gold industry sources also confirmed that the CEPA gold quota for 2025-26 have been approved. "What India announced today was a tightening up of gold imports," said a bullion dealer. "Essentially, it's removing the 'bad actors' who had been making use of the 5% import duty benefit through ordering platinum alloys and the like."

Gong forward, India has also changed the rules on imports of bullion and products that have gold where it is only a percentage of the product.

"What today's changes mean is there will be separate 'HS codes' (Harmonized System codes) for the various precious products," said Salam. "Earlier, even semi-finished alloys were using the same HS code meant for bullion." (Global trade bodies have assigned HS codes for various product categories.)

India has also confirmed that only three approved agencies can handle the import of bullion from the UAE.