(MENAFN- KNN India)
New Delhi, Jul 17 (KNN) The Global Trade Research Initiative (GTRI), a prominent think tank, has expressed significant concerns regarding the surge in precious metal imports from the United Arab Emirates (UAE) under the Comprehensive Economic Partnership Agreement (CEPA).
The organisation is calling for an investigation, citing potential impacts on India's domestic jewellery industry and substantial revenue losses.
The CEPA allows for duty-free imports of gold, silver, platinum, and diamonds from the UAE into India, with tariffs set to gradually reduce to zero in the coming years.
GTRI projects an annual revenue loss of Rs 63,375 crore due to duty-free gold and silver imports, based on FY2024 import levels. The agreement may shift import business from banks to private traders and replace traditional suppliers with Dubai-based firms.
Concerns have been raised about the impact on India's diamond and jewellery industry, particularly regarding imports through Gift City. GTRI suggests that many imports may not meet Rules of Origin conditions required for tariff concessions.
Gold imports from Dubai currently face a 5 per cent duty, which will drop to zero within three years for alloys containing 2 per cent platinum. Silver imports from the UAE have increased due to an 8 per cent duty under CEPA, compared to the general 15 per cent duty.
The agreement allows for reduced tariffs on gold jewellery imports from the UAE, potentially affecting domestic manufacturers. Zero tariffs on cut and polished diamonds under CEPA may impact India's diamond processing industry.
GTRI founder Ajay Srivastava has suggested a CAG audit to investigate potential pre-arranged deals and invoice manipulation, particularly for imports routed through Gift City.
The think tank emphasises the need for authorities to address these issues to maintain the integrity of import practices, protect domestic industries, and prevent significant revenue losses.
The GTRI has called for an urgent review of the agreement and its implementation. As of the report's publication, the commerce ministry had not responded to queries regarding GTRI's findings and recommendations.
(KNN Bureau)
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