India To Allocate Gold Quota Under Trade Pact With UAE Through Bidding Process

India has amended the allocation procedure for the tariff-rate quota (TRQ) of gold imports under the India–UAE Comprehensive Economic Partnership Agreement (CEPA). According to a notice by the Directorate General of Foreign Trade (DGFT), from this fiscal year, the quota will be allotted through competitive bidding or tender, a shift from previous methods. 

Key Details And Eligibility Criteria

Under the agreement, India is permitted to import up to 200 metric tonnes of gold annually from the UAE at a concessional duty rate of 1% under the TRQ mechanism. 

The revised DGFT notice mandates that applicants must be registered with the Bureau of Indian Standards (BIS) for hallmarking and must also have GST registration. Additionally, imports of gold dore under the TRQ will not be eligible. 

The bidding process will be facilitated online via DGFT’s portal, and the timelines and modalities will be notified annually. 

Implications For Trade And Industry

The switch to a transparent bidding process is expected to level the playing field for gold importers and reduce the scope for opaque quota allocations. Industry analysts believe this could influence domestic gold supply chains, jewellery manufacturing costs and strategic sourcing from the UAE. 

However, smaller jewellers and traders may face challenges competing in a bidding-driven allocation, especially if larger players dominate the process.

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Conclusion

By moving to a competitive allocation mechanism for the gold import quota under the India-UAE CEPA, the government is reinforcing its commitment to trade transparency and formalisation in the bullion sector. The effectiveness of this reform will depend on how it is implemented and how the industry adapts in the coming year.

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