The Global Trade Research Initiative (GTRI) has recommended withdrawing duty cuts on platinum, silver, diamonds, and gold jewellery as part of the review of the India-UAE Free Trade Agreement (FTA). This review is underway as the Indian government assesses the impact of the Comprehensive Economic Partnership Agreement (CEPA), signed on February 18, 2022, and implemented on May 1, 2022.
GTRI has highlighted concerns that the CEPA allows unlimited duty-free imports of these precious materials into India, which could negatively affect the domestic industry. The think tank has also pointed out potential misuse of the rules of origin outlined in the agreement, which could undermine its intended benefits.
In its review, GTRI suggested several key changes:
Revoking Duty Cuts: The think tank advocates for ending the duty reductions on platinum, silver, diamonds, and gold jewellery.
Adjusting Value Addition Rules: GTRI proposes modifying the value addition rules to exclude profit margins from the calculations required for tariff concessions.
Preventing Exploitation: The organization recommends banning the practice of converting expensive products, like silver bars, into cheaper forms, such as silver granules, to exploit CEPA benefits.
Additionally, GTRI urges the Indian government to halt imports of sanctioned metals from Russia via Dubai and to revoke special privileges granted to the Gift City bullion exchange, citing concerns of misuse.