The Comprehensive Economic Partnership Agreement (Cepa) is a strategic step forward for both the UAE and India as it would help the Emirates establish itself as the ‘Jewellery Gateway’ to the world, according to a leading jewellery group with a global presence.
Shamlal Ahmad, managing director of international operations of Malabar Gold & Diamonds, said the trade pact would help strengthen the already robust jewellery retail and wholesale business in the UAE while reinforcing the Emirates’ position as a preferred jewellery destination for shoppers looking for best quality, design options and value for money.
“With our global operations hub based in Dubai and considering that the UAE is discussing Cepawith other major countries, Malabar Gold & Diamonds is better-positioned to leverage its strategic locational advantage to achieve global business ambitions,” Ahmad said.
For India, the agreement, which came into force on May 1, will help it succeed in further promoting ‘Make in India; Market to the World’ initiative and encourage OEM manufacturing of jewellery in the country for global brands in addition to boosting jewellery exports, creating employment and skill development opportunities in the country, said Ahmad.
On Tuesday, the first consignment of jewellery that India sent to the UAE under the CEPA was received by heads of private sector gold business. The shipment of three packages contained approximately $1 million worth of precious gems and jewellery, according to Sanjay Sudhi, Indian Ambassador to the UAE.
The first consignment was flagged by the commerce secretary BVR Subrahmanyam from New Delhi at zero-duty. Before the Cepa implementation, traders had to pay a five per cent duty on imports.
According to Subramanyam, India imports 800 tonnes of gold every year. AS per the CEPA, India has given the UAE a tariff quota rate of 200 tonnes. Tariff in perpetuity will be one per cent less than tariff charged from rest of the world or on most favoured nation basis.
“India gets zero duty access to the UAE market on gems and jewellery. Five per cent duty on Indian jewellery is now zero, the gems and jewellery sector is gung ho. This will lure international jewellery operators who are running their businesses from Singapore and Hong Kong to shift to India,” the Indian official said.
Colin Shah, chairman, Gems & Jewellery Export Promotion Council (GJEPC), said the Cepa with the UAE will help in boosting India’s jewellery exports to the Gulf region. “This is a significant step in achieving the Prime Minister’s vision of making India a $5 trillion economy by 2025.”
According to GJEPC, the UAE accounts for 80 per cent of India’s plain gold jewellery exports and 20 per cent of studded jewellery exports. The Cepa will provide impetus and much-needed push to exports of gem and jewellery products to the UAE and gems and jewellery exports to the Emirates declined significantly to $1.18 billion in 2020-2021 due to the pandemic situation.
“With proposed zero duty, we are confident that exports of plain gold jewellery and gold studded jewellery from India to the UAE would surge to $10 billion in 2023,” GJEPC said in a statement.
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