India has officially announced a 180-tonne gold import quota from the United Arab Emirates (UAE) for the fiscal year 2025–26, under the framework of the Comprehensive Economic Partnership Agreement (CEPA). This strategic move signifies a deepening of economic ties between two influential trading partners while also offering crucial advantages to India’s gold trade ecosystem.
The announcement was made by the Directorate General of Foreign Trade (DGFT), which will oversee the allocation of this quota under preferential terms. Importers eligible under CEPA can bring in gold at a reduced customs duty of 5%, in stark contrast to the standard 6% rate levied on imports from other nations. The initiative, now in its second year of implementation, has stirred both excitement and debate across the country’s bullion and jewellery industry.
Gold : The CEPA Framework and Its Gold Clause
India and the UAE signed the CEPA in 2022, with the primary goal of expanding bilateral trade, streamlining tariffs, and enhancing cooperation in key sectors such as energy, textiles, logistics, and precious metals. One of the significant clauses under CEPA relates to gold—a commodity that plays a crucial role in Indian culture, commerce, and investment behavior.
The UAE, particularly Dubai, serves as one of the world’s largest gold trading hubs. The ability to import gold from the UAE at a preferential tariff has become a game-changer for Indian traders, especially those operating in cities like Mumbai, Ahmedabad, and Chennai where demand remains consistently high.
Under CEPA, India is granted an annual quota for duty-concession gold imports from the UAE. The 180-tonne limit for 2025–26 marks a continuation of the government’s push to balance trade benefits while keeping speculative practices under control.
A Flood of Applications and Stringent Screening
The 2025–26 quota saw an overwhelming number of applicants vying for their share of the 180 tonnes. The DGFT reported receiving over 2,960 applications—more than two-and-a-half times the number seen the previous year. However, nearly 1,400 of these were rejected after scrutiny, raising concerns within the industry regarding transparency and fairness.
Industry groups such as the Indian Bullion and Jewellers Association (IBJA) have voiced their frustrations. Many applicants were reportedly rejected based on a turnover filter—requiring proof of ₹25 crore average annual turnover over the last three financial years—even though a DGFT circular in June 2023 had removed that condition. This perceived reversal has led to confusion and disappointment among small- and mid-sized jewellers, some of whom feel excluded from the benefits intended by CEPA.
Prioritizing Active Traders
In a bid to make the quota distribution more equitable and efficient, the DGFT prioritized traders who had successfully utilized at least 80% of their previously allotted quota in FY 2024–25. The goal, according to officials, is to ensure that serious and active participants in the trade are rewarded with consistent access, thereby reducing speculative hoarding or secondary-market selling of quota rights.
The agency also capped the number of applications per entity to one and barred scheduled commercial banks from applying, as these institutions are already permitted to import gold independently as nominated agencies.
Import Regulations Tightened to Avoid Loopholes
While CEPA opens up significant opportunities, it also presents the risk of exploitation. To prevent misuse, the government has introduced stricter regulations on who can import gold under CEPA. Now, only qualified jewellers, nominated agencies, and those with valid Tariff Rate Quota (TRQ) licenses are eligible to import gold under the scheme.
Additionally, importers are subject to end-use declarations and customs scrutiny. Any misdeclaration or deviation could result in blacklisting or legal action, further signaling the government’s zero-tolerance approach to policy misuse.
By maintaining a controlled environment, India aims to protect its revenue, stabilize the gold market, and ensure that the benefits of CEPA reach genuine participants rather than middlemen or opportunistic traders.
Economic and Market Impact
From a macroeconomic standpoint, the import of gold under CEPA contributes to a more structured and legal trade channel, reducing dependency on grey-market inflows. Smuggling has long been a concern for Indian authorities, especially given the high import duties. The CEPA concessional rate helps reduce this incentive while providing price benefits to traders.
For the domestic market, the 1% duty savings—though modest on paper—can translate into major benefits when applied to large volumes. This could allow jewellers to offer more competitive prices, especially in the wedding and festival seasons when gold demand peaks. It also provides a pricing advantage to exporters of jewellery, helping Indian brands to compete more aggressively in international markets, particularly in the GCC and Southeast Asia.
Strengthening Indo-UAE Bilateral Trade
The gold quota is a small yet powerful element in the growing trade symbiosis between India and the UAE. Bilateral trade under CEPA crossed $85 billion in FY 2023–24, and precious metals accounted for a significant chunk of that exchange. By streamlining the gold trade, the two countries are reinforcing mutual trust and operational efficiency.
Dubai, in particular, benefits as it solidifies its role as a gateway to India’s massive consumer market. With logistical advantages, cultural proximity, and established trade channels, the UAE remains uniquely positioned to be India’s preferred gold partner.
Challenges and Future Considerations
Despite the benefits, several challenges remain. The biggest is the need for transparency in the allocation process. Industry veterans have urged the DGFT to publish clear guidelines and conduct quarterly audits of the scheme’s beneficiaries. A digital tracking system for TRQ utilization, along with real-time updates on allotments, could add a layer of accountability and prevent favoritism.
Secondly, more inclusive criteria could empower small-scale jewellers, especially from tier-2 and tier-3 cities, who often get sidelined by large corporate houses. These players form the backbone of India’s jewellery sector and deserve an equal shot at CEPA benefits.
Thirdly, continued dialogue between the government, trade associations, and UAE authorities will be essential to resolving emerging issues, whether related to customs, logistics, or trade balances.
Looking Ahead: The Strategic Value of Gold Trade
As India continues to grow as a global economic powerhouse, the management of precious metal imports—especially gold—will play a crucial role in trade diplomacy, foreign exchange management, and industry growth. The 180-tonne gold import quota under CEPA for 2025–26 is more than just a trade allotment; it’s a strategic lever that impacts the broader economic narrative.
For stakeholders on both sides of the Arabian Sea, this gold quota signifies not just a commercial opportunity but also a deepening bond. As long as transparency, equity, and compliance remain central to the implementation, India’s golden gateway to the UAE is likely to shine brighter in the years ahead.
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