The Indian Directorate General of Foreign Trade (DGFT) has notified that jewellers with a valid license can import a specified quantity of gold from the UAE under the free trade agreement. This has come as a boon especially to jewellers who can now import gold at concessional customs duties.

The directive specifies that only India-UAE TRQ (tariff rate quota) holders are permitted to import gold through IIBX (India International Bullion Exchange IFSC Ltd). And physical delivery of the imported gold can be done through vaults registered by IFSCA (International Financial Services Centres Authority) situated in Special Economic Zones.

The UAE is one of the major suppliers of gold to India after Switzerland. Concessional duties on gold imports of up to 200 tonnes per year have been agreed upon by New Delhi under the trade agreement. India levies a 15% import duty on gold in general.

The Comprehensive Economic Partnership Agreement between the two countries came into force in May 2022 and provides 1% duty concession to domestic importers on a specified quantity of gold under TRQ provisions of the pact. The government has, however, retained the condition that gold dore can be imported by refineries against an import license with actual user condition.

The move aims to provide a gateway to import bullion into India and provide a world-class bullion exchange ecosystem to promote bullion trading, investment in bullion financial products and vaulting facilities in IFSCs. IIBX launched in July 2022 is promoted by India’s leading market infrastructure institutions like NSE, INDIA INX (a subsidiary of BSE), NSDL, CDSL and MCX.

The IFSCA was set up in April 2020 under the International Financial Services Centres Authority Act, 2019 and is headquartered at Gujarat International Finance Tec-City Company Ltd (Gift City). It is a unified authority for the development and regulation of financial products, financial services and financial institutions.