India-UAE Gold Trade: Why Are Gold Imports Rising? Here’s What The 1% CEPA Deal Means
India’s gold imports from the UAE have surged due to lower tariffs under CEPA. Here’s why imports are rising and what it means for India’s economy and trade policy.
In the recent past, India has been importing a lot of gold from different countries. The table topper on the list is the United Arab Emirates (UAE). The Middle East is becoming one of the most important sources of gold imports for India.
This comes after India increased the import duty on gold and tried to control gold purchases. This step is important and was taken by the government to ease stress on the economy. But according to the data, gold imports from the UAE have increased. Economists are questioning what is behind this rise in gold imports from the UAE.
India’s gold-import surge has a Dubai connection
— Ajay Srivastava (@ajaydgft) September 2, 2026
PM Narendra Modi’s appeal to citizens to avoid unnecessary gold purchases highlights concern over India’s rising import bill.
But to check imports, the government must also examine the gold concession granted to the UAE under the… pic.twitter.com/3G1JQYy7qB
Is the 1% tariff difference in the India-UAE trade agreement creating this trend? Let’s decode the numbers, trade rules and gold rates.
Why Is India Importing More Gold From the UAE?
- 1% tariff difference: The main reason being discussed is the 1% tariff difference under the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
- Higher import duty: India standard import duty on gold was raised from 6% to 15% on May 13, 2026.
- Concessional duty: Eligible gold imports from the UAE can enter India at a concessional duty of 14%, provided they meet the required rules of origin.
- Impact of the difference: Although the difference is only 1%, it can become significant when large quantities of high-value gold are imported.
Why Is the 1% Difference Important?
To a regular buyer, this might not be a huge difference. To a gold importer, this is important. It needs to be considered in terms of quantity. All the gold importers bring in gold in bulk, and for them, this 1% could be a significant amount.
As we all know, gold is a high-value commodity. Even a 1% saving on a big shipment can make a big difference for the importers and traders. All the Gold imports that qualify under the India-UAE CEPA can be imported into India for a duty of 14%. It is less against other countries, where the duty is 15% for imports.
The benefit only applies under certain conditions and within the tariff quota. Still, this small price differential can make the UAE more appealing to gold importers, and a steady supply of gold transfers to the country.
India-UAE Gold Import Growth (GTRI Data)
| Period | Gold Imports from UAE | Year-over-Year (YoY) Change |
| June 2025 | $235.9 million | - |
| June 2026 | $649.4 million | +175.2% |
| April–June 2025 (Q1) | $1.40 billion | - |
| April–June 2026 (Q1) | $3.14 billion | +124.8% |
What Does It Mean For India?
The sharp increase in gold imports from the UAE has prompted trade experts to question India's economic measures. The rise has come mainly because of lower tariff rates under India's CEPA with the UAE. The development could also influence India's trade balance during times of global financial crisis.
The government wants to curb unnecessary gold imports to continue reducing the pressure on foreign exchange reserves, and to help reduce the Current Account Deficit (CAD). Prime Minister Narendra Modi has also called on people to restrain themselves from gold purchases at a time of uncertainty. The objective is to move people towards investing their money in more productive areas such as manufacturing and technology, and in building infrastructure.
The government also wants to ensure that trade deals do not provide unintended tax concessions, and also run counter to India's trade objectives.
Aishwarya Samant is a journalist with over 4 years of experience navigating the fast-paced corporate media landscape. She specializes in decoding business news, world economy, personal finance, and stock market trends, often adding a subtle touch of political perspective to keep things interesting.
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