India’s commerce ministry didn’t reply to a request for remark. A UAE spokesperson didn’t instantly reply to an electronic mail in search of remark.
Underneath the present deal, India has already diminished normal import taxes on gold, whereas silver and platinum duties, each decrease than bullion, are being phased down.
Whereas imports from the UAE fell within the monetary yr 2023-24 in contrast with the sooner yr, import of silver and platinum boomed. Inbound shipments of silver within the first half of 2024 soared 42,389% to over 2,200 tons in comparison with the identical interval in 2023, in line with official information. Platinum imports jumped 995% to 1.7 tons.
The surge, coming from a nation with out treasured metals mines, has led to suspicions the imports don’t in truth qualify for preferential therapy. Some merchants may additionally be dodging the upper tariffs on gold by registering the imports as platinum, among the folks mentioned.
Underneath World Customs Group classifications, any metallic alloy containing 2% or extra of the cheaper metallic is outlined as platinum.
India’s new import duties regime introduced in July has eradicated the loophole’s monetary advantages — on the time, India slashed import taxes on gold and silver to six% from 15%, in a transfer to help home jewellery producers. However the current cope with Dubai will ultimately take away all taxes on each silver and platinum imports — opening up new incentives to relabel shipments.
Issues over India’s treasured metals commerce with Dubai have been first raised in June in a report by the New Delhi-based suppose tank International Commerce Analysis Initiative. The group identified that the present coverage framework is enabling the flows and “exacerbating India’s commerce deficit.”
(By Shruti Srivastava and Sybilla Gross)