The UAE and India's Comprehensive Economic Cooperation Agreement (CEPA) which came into effect from May 1, has had its desired effect, with India’s gem and jewellery exports to the UAE rising significantly.
In May alone, the value of gem and jewellery exports from India to the UAE rose by 72% to INR 10.48 billion ($131 million) compared to the previous month, according to a top official of an industry group in India.
Saiyam Mehra, Vice Chairman of All India Gem & Jewellery Domestic Council (GJC), said the export momentum was sustained in June 2022, when exports also rose by INR5.2 billion ($65 million). Gold accounts for 60% of the gem and jewellery exports from India.
UAE exports of gold bullion to India reached the 120-tonne mark since CEPA was implemented in May 2022. Under the CEPA deal, India is allowed to import a maximum of 120 tonnes of gold in the first year at 14% import duty against the official 15% duty, which will increase to 200 tonnes per year for the rest of the five-year period.
CEPA provides for simplification of customs procedures, reduction of logistics cost and duty-free access to both markets for a large number of products and commodities to raise the bilateral trade to $100 billion in five years. Import duty on finished jewellery products exported to the UAE from India has been reduced from 5% to 0%.
Mehra said the reduction of import duty from 5% to 0% will benefit the jewellery retailers in the UAE who will automatically pass on the gains to end consumers. Similarly, it is beneficial to Indian traders when gold is imported from the UAE by paying only 14% import duty instead of 15% from elsewhere.
“The CEPA deal provided all gold importers with 1% break (from 15% to 14%) which will make gold trade competitive in India,” said S. Abdul Nazar, Director of All India
The Gem & Jewellery Domestic Council represents thousands of trade constituents comprising manufacturers, wholesalers, retailers, distributors, laboratories, designers and allied services.
The GJC officials were in Dubai to attract international buyers to its India Gem & Jewellery Show, which will be held from September 22 to 25 in Mumbai, India. The show is expected to be participated by more than 450 exhibitors and 15,000 trade visitors.
(Reporting by Bhaskar Raj; editing by Cleofe.Maceda)