India to Discuss Rising Precious Metals Imports with UAE
India and UAE to Review CEPA and Tax Rules After Sharp Increase in Silver and Platinum Imports
India to Renegotiate Trade Deal with UAE Amid Surge in Precious Metals Imports
India is seeking to renegotiate a trade deal with the United Arab Emirates after a surge in imports of precious metals from the Middle Eastern nation fueled concerns that some traders were taking advantage of tax loopholes.
Trade officials are likely to meet their counterparts from the UAE next month to review the two countries’ Comprehensive Economic Partnership Agreement (CEPA), said people with knowledge of the matter, who asked not to be identified because the talks are private. Among other issues, they will examine the effectiveness of rules guaranteeing the geographic origin of platinum, silver and gold imports for tax purposes, the people added.
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India’s commerce ministry did not respond to a request for comment. A UAE spokesperson did not immediately respond to an email seeking comment.
Under the existing agreement, India has already reduced standard import duties on gold, while silver and platinum duties are being reduced in a phased manner lower than bullion.
Imports of silver and platinum surged in FY 2023-24 compared to the previous year, though imports from the UAE declined. Inbound exports of silver rose 42,389% to 2,200 tonnes in the first half of 2024 compared to the same period in 2023, official data showed. Platinum imports surged 995% to 1.7 tonnes.
The surge from a country without precious metals mines has led to suspicions that imports are not actually eligible for preferential treatment. Some traders may be avoiding higher tariffs on gold by registering imports as platinum, some people said.
Under the World Customs Organization classification, platinum is defined as any metal alloy containing 2% or more of the base metal.
India’s new import duty regime announced in July wiped out the economic benefits of loopholes – at the time, India cut import duties on gold and silver from 15% to 6% to support domestic jewelery makers. But an existing deal with Dubai will eventually remove all taxes on silver and platinum imports — opening up new incentives for relabelling exports.
Concerns about India’s precious metals trade with Dubai were first raised in a report by New Delhi-based think tank Global Trade Research Initiative. The group pointed out that the current policy framework enables flows and “increases India’s trade deficit”.
