India-UAE Trade Pact: Jewellery sector, apparel exports, employment to get huge boost

The domestic jewellery sector will get a huge export boost in the United Arab Emirates (UAE) market as it would get duty-free access there, while the gulf nation will get greater access to the gold market here as India will give duty concessions on import of up to 200 tonnes, Commerce Secretary B V R Subrahmanyam said on Saturday. India has agreed to concessional import duties on gold imports of up to 200 tonnes per year. India imported about 70 tonnes of gold from the UAE in 2020-21.

Meanwhile, the FTA would help boost the country’s exports and creation of lakhs of jobs, according to exporters. Welcoming the signing of the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) on Friday, Apparel Export Promotion Council (AEPC) Chairman Narendra Goenka. “With India supplying $1,515 million of apparel to the UAE as against its total imports of $3,517 million, Indian apparel  exports contribute a decent share of 43 percent. The trade pact would result in a drop of 5 percent import duty for Indian readymade garments. This will further strengthen the dominant position of Indian apparels in the UAE,” Goenka said.

Commerce Secretary B V R Subrahmanyam said, “We are a major importer of gold. India imports about 800 tonnes of gold every year. In this particular agreement, we have given them (UAE) a TRQ (tariff rate quota) of 200 tonnes where the tariff (or import duty) in perpetuity will be one per cent less than whatever is the tariff charged for the rest of the world. Therefore, the UAE has a one percent price advantage in gold bars. That one percent tariff difference means those 200 tonnes will be diverted to the UAE,” the secretary told reporters.

He said the biggest gain for India is “that we get zero duty access” to the UAE market for domestic jewellery. There was a five per cent duty on Indian jewellery and now, “it’s gone to zero”, so the gem and jewellery sector is “gung-ho”, he added.

Courtesy: CNBC tv 18