India tightens gold import rules under UAE trade pact, moves to competitive bidding system

New Delhi: The directorate general of foreign trade (DGFT) has revised procedures for allocating tariff rate quotas for gold imports under the India–UAE comprehensive economic partnership agreement (CEPA), introducing new eligibility criteria and shifting to a competitive online bidding system.

Under the new conditions, applicants seeking tariff rate quotas (TRQ) for gold imports must now be registered with the Bureau of Indian Standards (BIS) for hallmarking and also hold a valid GST registration.

The DGFT has reiterated that the import of gold dore (semi-pure gold alloy) under the TRQ route will not be allowed, a restriction that continues from the previous framework.

As per the DGFT notification, the allocation of gold import quotas under CEPA will now be made through a competitive online bidding or tender process, replacing the earlier nomination-based system.

The new mechanism aims to ensure fairness, improve transparency, and provide equal opportunities for all eligible jewellers, preventing the concentration of quota benefits among a few dominant players and encourage wider participation, particularly from BIS-certified and GST-compliant jewellers.

The competitive bidding system will bring greater efficiency, accountability, and oversight to India’s gold import quota system under CEPA, which was signed in 2022 to promote bilateral trade in high-value sectors, including precious metals, government officials said.

Gold imports under CEPA are allowed at preferential tariff rates, subject to annual quota limits. India, one of the world’s largest gold importers, has witnessed sustained demand from jewellery manufacturers that benefit from these concessional duties.

According to a government notification issued on Monday, the DGFT has amended the rules under the Foreign Trade Policy (FTP) 2023, updating the provision which defines the process for importing gold under tariff code 7108 through this bilateral trade pact.

“Eligible applicants for TRQ under the India–UAE CEPA for FY 2025–26 may file their applications online through the DGFT Import Management System during the specified period. The detailed timelines and modalities for participating in the bidding process will be notified each year through a trade notice,” the notification said.

The notification said the changes reflect the government’s broader push to make TRQ allocations more transparent, technology-driven, and policy-aligned with evolving trade priorities.

Earlier, the DGFT had also tightened export compliance requirements for jewellery manufacturers operating under the advance authorisation scheme to plug procedural loopholes amid a surge in gold imports — a major factor behind India’s widening trade deficit.

As reported by Mint on 24 October, the DGFT aligned export timelines with the FTP 2023, mandating exporters to fulfil their export obligations within 120 days of import and eliminating the earlier provision that allowed time extensions.

The move comes as India’s gold imports nearly doubled to $9.6 billion in September, up from $4.6 billion in August, driven by festive-season demand and speculative buying. The surge pushed India’s trade deficit to a 13-month high of $32.15 billion, largely due to the spike in bullion imports.

According to a senior government official, this initiative aims to strike a balance between trade facilitation and regulatory discipline. “By enforcing stricter timelines and introducing online auctions, the DGFT aims to curb advance stocking, improve traceability, and ensure that duty-free gold imports are genuinely used for jewellery exports.”

India’s jewellery export sector, which contributes nearly $30 billion annually, remains one of the country’s most closely watched segments amid concerns over import-driven trade imbalances and compliance lapses.