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India’s sharp rise in gold imports since the signing of the India-UAE trade agreement has come under renewed scrutiny, with trade think tank Global Trade Research Initiative (GTRI) backing Prime Minister Narendra Modi’s call to curb gold purchases and urging the government to review tariff concessions granted to the UAE under the bilateral free trade pact.
India’s gold imports climbed from $36.5 billion (about ₹3 lakh crore at current exchange rates) in 2022 to $58.9 billion (around ₹5 lakh crore) in 2025, putting increasing pressure on the country’s trade deficit and foreign exchange reserves, according to GTRI data.
The think tank argued that the surge has been driven in large part by concessional duty provisions granted under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into force in May 2022.
Under the agreement, India allows gold imports from the UAE at tariffs one percentage point lower than standard import duties through a Tariff Rate Quota (TRQ) mechanism. The quota initially covered 120 tons annually and is scheduled to rise to 200 tons from 2027, accounting for nearly a quarter of India’s total gold imports.
The duty advantage widened after the Union Budget 2024 reduced the normal gold import duty from 15% to 6%, effectively lowering the tariff on UAE-origin gold to 5%.
GTRI said the concessional structure, combined with the opening of direct bullion imports through the India International Bullion Exchange at GIFT City, accelerated imports routed via Dubai.
India’s gold bar imports from the UAE rose from $2.9 billion (₹24,000 crore) in 2022 before the CEPA took effect to $6.7 billion (₹56,000 crore) in 2023, before surging further to $16.5 billion (₹1.4 lakh crore) in 2025.
As a result, the UAE’s share in India’s gold imports jumped from 7.9% in 2022 to 28% in 2025.
“The trend raises serious concerns because the UAE neither mines gold nor undertakes significant value addition,” GTRI said, suggesting that large quantities of bullion may simply be routed through Dubai to take advantage of lower Indian tariffs.
The think tank warned that Rules of Origin provisions under the CEPA could be vulnerable to misuse, allowing third-country gold to qualify for preferential access after minimal processing in Dubai.
The comments came days after Modi appealed to Indians to defer non-essential gold purchases, including wedding-related buying, for a year in the national interest amid heightened global economic uncertainty and pressure on India’s external balances.
India imports almost all the gold it consumes, making bullion one of the country’s largest non-oil import items and a recurring source of stress on the current account deficit.
GTRI recommended tighter Rules of Origin norms, a review of precious metal concessions under existing free trade agreements, and exclusion of gold, silver, platinum, and diamonds from future trade deals.
“Trade agreements should support productive manufacturing and exports, not incentivize large-scale bullion inflows that strain forex reserves,” said GTRI founder Ajay Srivastava.
Year UAE Gold Imports India’s Total Gold Imports UAE Share
2022 $2.9 bn (₹24,000 crore) $36.5 bn (₹3 lakh crore) 7.9%
2023 $6.7 bn (₹56,000 crore) $42.6 bn (₹3.5 lakh crore) 15.7%
2025 $16.5 bn (₹1.4 lakh crore) $58.9 bn (₹5 lakh crore) 28.0%
