India has reported an increase in imports of silver products from the United Arab Emirates (UAE). At a joint committee meeting under the India-UAE Comprehensive Economic Partnership Agreement, the Indian delegation raised the issue of the recent surge in imports of silver products and alloys platinum. He urged the UAE to verify compliance with the rules of origin and ensure that they are not circumvented.

According to a statement from the Ministry of Commerce, “the UAE has agreed to look into the concerns raised by its Indian counterparts.”

India signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE in 2022, under which duties on silver imports will be gradually reduced to zero over 10 years. Under the terms of the agreement, customs duties on silver imports from the UAE will fall to 6 percent on April 1, 2025, and then to 5 percent the following year. In other words, the zero-tariff policy under CEPA is likely to shift all Indian imports of precious metals, gems and jewelry to the UAE.

Currently, the duty on silver imports from the UAE is 8 percent under CEPA. This pushed UAE silver imports to $1.7 billion in 2023-24, up from $29 million in FY23, due to concerns over gaps in the implementation of rules of origin.

According to a report by the Global Trade Research Initiative, the CEPA with the UAE could result in a significant revenue loss for India, estimated at Rs 63,000 crore, and disrupt domestic activities. Calling for a review of the provision to prevent exploitation of tariff clauses, the top trade research body said it would lead to significant revenue losses, shift import businesses from banks to a few private traders and replace leading suppliers by Dubai based companies.

In FY24, India and the UAE had a total trade of $83.64 billion, including $35.63 billion in exports and $48.02 billion in imports.