New Delhi: The government should withdraw the duty cut concession on platinum, silver, diamond, gold jewellery in the free trade agreement (FTA) with the UAE, said the Global Trade Research Initiative (GTRI), an economic think tank.

India and the United Arab Emirates (UAE) signed the FTA on 18 February 2022. It is officially called the Comprehensive Economic Partnership Agreement (CEPA) and came into force on 1 May 2022. The government is now considering reviewing some provisions of the free trade agreement with the UAE.

Domestic industry likely to suffer losses

According to GTRI, the agreement provides for unlimited import of duty-free gold, silver, platinum and diamonds into India in the next few years and this will harm the domestic industry. GTRI claims that there is a possibility of abuse of the rules of origin in the agreement. For this reason India should review CEPA. It is mandatory to fulfill these rules to get duty concessions under the agreement.

Advocacy for making rules stricter

GTRI also suggested the government to stop the import of banned metals from Russia via Dubai and revoke the privileges given to GIFT City Bullion Exchange due to abuse. The main objective of the review should be to reduce large-scale bullion imports and tighten the rules of origin to prevent abuse of bullion imports from Dubai.

What did the GTRI founder say on the suggestions? 

GTRI founder Ajay Srivastava says that India has agreed to zero duty on unlimited quantities of platinum from Dubai. The duty will be reduced from today's five percent to zero by 2026. This is a major concern for India, because according to WCO (World Customs Organization) classification rules, only any metal with two percent platinum can be classified as platinum.