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UAE-India trade pact: Dubai's gold sector to get boost from tax cut

UAE-India trade pact: Dubai's gold sector to get boost from tax cut 04.05.2022
Jewellery companies in the UAE and India are set to gain from a key trade agreement that comes into effect on Sunday.

Sweeping changes will be introduced under the Comprehensive Economic Partnership Agreement signed in February and jewellers are upbeat because the rules for importing gold bars from the UAE and jewellery from India have been overhauled.

Import duties, previously at five per cent, have been scrapped for jewellery exported to the UAE from India under the pact.

This will give Indian jewellers zero-duty access to the UAE market.

India has agreed to a one per cent concession on duty on gold imports from the UAE for up to 120 tonnes of gold in the first year, rising to 200 tonnes in five years.

The Indian government has said this gives the export of gold bars or bullion from the UAE a significant advantage “in perpetuity” compared to the tariff India charges the rest of the world.

Analysts and jewellers told The National that Dubai would emerge as a major gateway for Indian jewellery to markets in the Middle East, North Africa and Central Asia.

The new trade pact is also expected to help India become attractive as a manufacturing hub for jewellery with more global brands likely to make the country their production base.

India is among the world’s top consumers of gold and imports about 800 tonnes of gold every year.

The country imported about 70 tonnes of gold from the UAE in 2020-21.

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