India has prioritized importing 140 metric tons of gold from the UAE at a reduced rate of one percent under the Comprehensive Economic Partnership Agreement (CEPA) signed between the two countries, effective May 1, 2022. 

The CEPA is aimed at boosting bilateral trade and investment in various sectors, including goods, services, and investment. The goal is to increase two-way annual trade to US$100 billion in five years, and around 11,000 items can now be exported from India to the UAE duty-free. The gold tariff rate quota (TRQ) will be allocated to applicants as per India’s revised eligibility criteria under the 2023 Foreign Trade Policy. 

GIFT City has been nominated as the agency to import 200 metric tons of gold from the UAE under the CEPA arrangement, which will subsequently be distributed to other parts of India. The UAE has provided India with zero-duty market access for its gold jewellery exports, while India will enjoy a gold TRQ of 140 metric tons in FY 2023-24. 

The CEPA is part of India’s proactive efforts to promote trade with key markets, including the Gulf Cooperation Council countries. The gems and jewellery sector contributes around seven percent to India’s GDP and about 10-12 percent of total merchandise exports, employing over five million skilled and unskilled labour.