The Centre has amended the gold import policy condition to give further fillip to the gold trade between India and UAE.
The Directorate General of Foreign Trade (DGFT) has now allowed gold to be imported through India International Bullion Exchange IFSC Ltd (IIBX) at a concessional import duty rate under the tariff rate quota (TRQ) provisions of India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into effect from May 2022.
“Valid India-UAE TRQ holders, as notified by IFSCA, can import gold through IIBX against the TRQ and can obtain physical delivery of the same through IFSCA registered vaults located in SEZs as per the guidelines prescribed by the IFSCA,” the DGFT said in a notification.
Facilitating trade
Reacting to this development, Vipul Shah, Chairman, The Gem and Jewellery Export ProMotion Council, told businessline this move will facilitate the trade of gold between the two countries and benefit the Indian jewellery industry. it will reduce transaction costs and enhance the ease of doing business, he added.
“This will also help in creating a vibrant gold market in India and boost the exports of value-added jewellery products. We appreciate the efforts of the Government of India and the IFSCA in implementing this progressive policy measure,” Shah added.
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The India-UAE CEPA provides one per cent duty concession to domestic importers on a specified quantity of gold under TRQ (tariff rate quota) provisions of the pact.
The DGFT provides TRQ certificate to companies for imports and they are also notified by International Financial Services Centres Authority (IFSCA).
IIBX, which was established at GIFT IFSC, Gandhinagar in July 2022, is regulated by the IFSCA and is promoted by India’s leading market infrastructure institutions like NSE, INDIA INX (a subsidiary of BSE), NSDL, CDSL and MCX.
IIBX has been conceptualised 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.
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Bullion is kept in the vaults authorised by IFSCA and empanelled by India International Depository IFSC Ltd. Bullion on IIBX is traded in the form of Bullion Depository Receipts.
India is the world’s second largest jewelry market after China. In 2021, India bought 611 metric tons of gold.
The UAE was India’s third largest trade partner in 2022-23 with two-way trade reportedly at $76.16 billion. Saudi Arabia came fourth at $52.72 billion.