India seeks review meet with UAE to discuss rules of origin under CEPA

UAE President Mohamed bin Zayed Al Nahyan with PM Modi

India has sought a review meeting with United Arab Emirates (UAE) to discuss key matters linked to the Comprehensive Economic Partnership Agreement (CEPA) between them, including on issues around rules of origin.

"When you have agreements, you also have conditions. When you give a concessional rate there are conditions too, so in a review we will see everything holistically. How the rules of origin are being met or not, what is future course of action," Commerce Secretary Sunil Barthwal said on August 14.

The UAE-India CEPA entered into force on May 1, 2022.

India allows seven percent tariffs or customs duty concessions on import of unlimited quantities of silver and a one percent concession on 160 metric tonnes of gold as a part of the trade pact with UAE.

"As regarding CEPA, there are two things --value addition and concessional rates offered. We are in discussion with them, we are seeking a review with them and once we get the review we will look at all issues holistically," Barthwal added.

Economic think tank Global Trade Research Initiative (GTRI) had in June said that the sharp rise in gold and silver imports were primarily driven by import duty concessions granted by India to the UAE under the CEPA.

GTRI had further said, "many imports do not meet Rules of Origin conditions, hence do not qualify for concessions, raising the strong possibility of money laundering. The value addition process for silver imports is questionable, with concerns about money laundering."

India's gold and silver imports from its free trade agreement (FTA) partner UAE rose 210 percent to $10.7 billion in 2023-24, GRTI had pointed out back then.

The Union Budget slashed the duty on gold and silver to 6 percent from 15 percent.

Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal had told Moneycontrol earlier that a spike in imports of these precious metals prompted the decision to reduce import duties levied on them.