look news india
New Delhi: India's gold and silver imports from the United Arab Emirates (UAE), with which India has a free trade agreement (FTA), grew 210 per cent year-on-year to $10.70 billion in the financial year 2023-24. According to a report by the Global Trade Research Initiative, the customs duty relief given under the agreement needs to be reconsidered. Duty relief has caused a huge revenue loss to India.
The surge in imports is due to the relief in import duty provided under the India-UAE Comprehensive Economic Partnership Agreement on import of gold and silver from the UAE, a PTI report said.
Customs duty has been exempted by 7 per cent on any quantity of silver while import duty has been exempted by 1 per cent on up to 160 tonnes of gold. The Comprehensive Economic Partnership Agreement has come into force from May 2022.
The seven per cent duty relief cost India a revenue loss of Rs 1,010 crore last fiscal. India's commitment to bring down import duty on silver from the UAE to zero over the next eight years will lead to a huge revenue loss in the coming years.
Private importers from India can also import gold and silver from the UAE through the India International Bullion Exchange. Earlier, only official agencies were allowed to do this.
India's total imports from the UAE declined by 9.80 per cent to $48 billion in the previous fiscal year, but gold and silver imports rose 210 per cent to $10.70 billion in fiscal year 2023-24 from $3.50 billion in 2022-23.
The report also said that imports of other products declined from $49.70 billion to $37.30 billion during this period.
Since the UAE does not mine gold and silver itself, it cannot afford to import it in large quantities from India as its value remains stable.
Due to the high import duty of 15% on gold and silver in India, smuggling of this product is also high. To reduce smuggling, it has been requested to reduce the import duty to 5%.
