India is aiming to increase its exports to the UAE to $50 billion by FY 2027 even as gold imports from the UAE may also increase. Speaking at a briefing to mark the 1st anniversary of implementation of the India-UAE CEPA, Commerce Secretary Sunil Barthwal pointed to the government data which indicated that exports in the sectors of electrical machinery and equipment & automobiles to the UAE grew by 32 percent and 42 percent respectively year-on-year from April 2022 to March 2023, whereas there was a year-on-year rise of 11.2 percent in the overall value of India’s exports to UAE, which clocked $31 billion from April 2022 to March 2023.
The import of aircrafts, spacecrafts and associated parts has also risen 4,859 percent year-on-year, from a small base, from April 2022 to March 2023.
Last week, the DGFT had decided to open a fresh window to invite new applications for Gold Tariff Rate Quota (TRQ) to be notified under the India-UAE CEPA. The Gold TRQ is to be allocated to all new and old applicants as per the revised guidelines.
DGFT had maintained that any apprehension of favouring 78 jewellers was unfounded, pointing to the decision taken on 31st March 2023 when India acceded to UAE's request to remove restrictive criteria like allocation of Gold TRQ to only jewellery manufacturers and allowed all importers to avail the scheme.
On 29th December 2022, DGFT had invited applications for TRQ for FY 2023-24 with an application deadline of February 28, 2023, when 78 applications were received and a preliminary EFC (Exim Facilitation Committee) meeting was held on March 23, 2023 to provisionally allocate TRQ.
The India-UAE CEPA came into force on May 19, 2022, as both nations exchanged tariff concessions on products of mutual export interest. UAE had offered tariff concessions to India on over 97 percent of its tariff lines amounting to 99 percent of trade in value terms, apart from an immediate zero duty market access for export of gold jewellery from India (current duty in UAE is 58).
In return, the TRQ for Gold increased from 110 MT in 2022-23 to 140 MT in 2023-24, and is projected to gradually rise to a maximum of 200 MT over 5 years, with only $1 duty concession on the applied MFN rate.
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