Industry body urges FM to check rising gold, silver import from UAE

Vijay C Roy

Chandigarh, July 10

Amid surge in imports of gold and silver from the UAE under the Comprehensive Economic Partnership Agreement (CEPA), All India Jewellers & Goldsmith Federation has approached Union Finance Minister Nirmala Sitharaman for revaluation and revision of concessional duty rates granted under the CEPA.

Industry insiders said the problem was not only affecting the current account deficit but also the small traders and manufacturers as the entire trade was dominated by a few players.

According the data, between FY 2023 and FY 2024, gold and silver imports increased by 210 per cent. India’s imports of gold and silver from the UAE jumped to USD 10.7 billion in 2023-24, while total silver imports stood at USD 5.4 billion.

“The main reason for this sharp increase is the import duty concession given on import of these metals from the UAE specifically concession of 7 per cent have been given on silver and 1 per cent on gold. Further the ban imposed by DGFT on import of gold jewellery from other countries has further increased imports from the UAE,” said Pankaj Arora, President of the Federation.

This policy framework has led to a sharp increase in import from the UAE which had negative impact on India’s trade deficit, he said.

Nitin Kedia, National General Secretary of AIJGF, said: “The UAE does not produce gold and silver but only melts and re-melts these metals and export them. Hence, the concession given on imports are leading to revenue loss for India and this trade deficit may shift to countries which get bigger concessions than India.”

He said additionally, due to higher price and high import duties, there was a possibility of abuse in the trade of gold and silver at low duty. High imports duties on gold and silver and jewellery at 15 per cent were at the root cause of problem. The jewellers requested the finance minister to reduce it to 5 per cent. “This will prevent large scale duty evasion,” Kedia said.

“We have requested the Union finance minister to re-evaluate and revise the concessional duty rates granted under the CEPA to curb the surge in gold and silver imports by introducing annual quotas for silver,” he said.