India's gold imports from the United Arab Emirates (UAE) under the 2022 trade agreement are drawing fresh attention amid India's push to curb bullion imports to conserve foreign reserves.
Gems and jewellery imports from the UAE, dominated by gold, have surged to one-third of India's total shipments in 2025-26, according to commerce ministry data reviewed by Mint.
Even as India’s gems and jewellery imports hit a record $71.98 billion in 2025-26, imports from the UAE rose from $14.79 billion in 2022-23 to $27.09 billion in 2024-25, and stood at $24.08 billion during April-February 2025-26.
Total gems and jewellery imports from the UAE stood at $15.93 billion in 2021-22, according to the Gem & Jewellery Export Promotion Council.
At the same time, utilization of the tariff rate quota (TRQ), which allows a limited quantity of gold imports from the UAE at a duty rate one percentage point lower than the standard rate, has remained modest at about 140 tonnes in 2024-25 and just 8.58 tonnes so far in 2025-26.
The trend has raised concerns that higher inflows under the concessional route could dilute the impact of 15% customs duty on gold and silver, as traders may increasingly route imports through the lower-duty quota, weakening efforts to curb imports and manage the trade deficit.
It also assumes significance as Prime Minister Narendra Modi has appealed to citizens to avoid buying gold for at least a year, urging them to invest in productive assets instead to help reduce the country’s import burden and strengthen the economy.
“The trade agreement does offer some price advantage due to differential duty and would hence need to be monitored. Unlike oil, which uses shipping routes, gold has fewer logistics challenges. Importers may like to explore this route to save on duty,” said Madan Sabnavis, chief economist, Bank of Baroda.
Mint's queries emailed to the commerce and industry ministry seeking comments didn't elicit an immediate response.
Less than desired uptake
Meanwhile, the government has extended the validity of pending TRQ authorizations until 30 June 2026, citing global supply disruptions.
For now, experts say several petitions pending in the Delhi high court over the process are keeping the uptake low.
“The matter is currently before the court, so the industry has not been able to fully utilize the concessional benefits under the agreement. As a result, the expected growth through the concessional route has not materialized yet,” Said Surendra Mehta, national president, India Bullion and Jewellers Association.
Trade officials maintain that the overall India-UAE trade story is broadening beyond gold. Non-gems and jewellery, non-petroleum exports to the UAE have grown steadily to $22.03 billion in April-February 2025-26 from $17.15 billion in 2022-23, while similar imports rose to $14.31 billion. Total bilateral trade crossed $100 billion in 2024-25.
India signed the CEPA with the UAE on 18 February 2022, and it entered into force on 1 May 2022. Under the pact, India secured duty-free and preferential market access for 97% of UAE tariff lines, covering 99% of its exports, with immediate duty elimination on over 80% of those lines.
The UAE has also emerged as a key investment partner, ranking as India’s seventh-largest investor with cumulative foreign direct investment equity inflows of $25.1 billion between April 2000 and September 2025. Post-CEPA, FDI from the UAE jumped nearly 75% to $9.75 billion during FY23-FY25 from $5.57 billion in the three years before the agreement.