Many valuable items including gold and silver are coming between UAE and India without tax. Now there is a demand to ban this

Economic think tank, the Global Trade Research Initiative (GTRI), has urged the government to withdraw the duty reduction concession on platinum, silver, diamond, and gold jewellery given in the free trade agreement (FTA) with the United Arab Emirates (UAE).

What is FTA and why is a review needed?

A Comprehensive Economic Partnership Agreement (CEPA) was signed between India and the UAE on 18 February 2022, which came into force on 1 May 2022. Under this agreement, duty concessions have been given on many metals, making it easier to import these metals into India. Now the government is considering reviewing some provisions of this agreement.

Impact on domestic industry

GTRI says that under the FTA, gold, silver, platinum and diamonds can be imported duty-free into India in the next few years, causing major losses to the domestic industry. They claim that the rules of origin can be abused under this agreement, leading to instability in the Indian market. Therefore, GTRI has suggested that the government review this agreement and withdraw the duty concessions given on these metals.

Suggestion to tighten rules of origin

GTRI has also suggested that stringent measures be taken to prevent the import of banned metals from Russia via Dubai. Along with this, action should also be taken to prevent the abuse of privileges given to GIFT City Bullion Exchange. The main objective of this review should be to control bullion imports and tighten the rules of origin to prevent the abuse of imports from Dubai.

What does the founder of GTRI have to say?

Ajay Srivastava, founder of GTRI, says India has agreed to import unlimited quantities of platinum from Dubai at zero duty, which will be zero by 2026. This is a matter of concern for India because according to the World Customs Organisation (WCO) classification rules, even a metal with just two per cent platinum can be classified as platinum.