A golden age of duty-free trade dawns with sparkling $1m shipment of Indian jewellery

Duty-free imports including gold, gems and jewellery valued at $1 million arrived in the UAE from India yesterday, days after the countries signed a milestone economic partnership.

With the previous 5 per cent duty on the items scrapped under the new agreement, the first customers to import duty-free goods saved about $50,000 in tax.

In recognition of the first goods to be imported under the Comprehensive Economic Partnership Agreement, Sunjay Sudhir, India’s ambassador to the UAE, and Juma Al Kait, assistant undersecretary of International Trade Affairs at the Ministry of Economy, handed the items to representatives from Malabar Gold & Diamonds, Siroya Jewellers and JewelOne Jewellery.

“The first consignment had an approximate value of about $1 million,” Mr Sudhir said. “Prior to the signing of Cepa, the duty would have been charged at 5 per cent but today it was zero per cent.

“On day one of Cepa coming into force, 90 per cent of India’s export by volume has now become duty-free and I think today’s momentous occasion has started things off with a bang.”

As the UAE received its first consignment of goods from India yesterday, a similar shipment from the Emirates was sent to India under the deal.

Gold and jewellery constitutes a large portion of the bilateral trade between the UAE and India, and both Mr Sudhir and Mr Al Kait said Cepa would clean up the sector and enable better business.

“Between our two countries, gold, gems and jewellery are such important items,” Mr Sudhir said. “For example, to go by our figures from last year, where our [India’s] financial year is from April to March, India imported about $14 billion worth of gold and unpolished gems, and exported about $5bn worth of jewellery.

“To incentivise trade by breaking down the duties and institutionalising mechanisms for easier import or export, I think things become much better for business.

“Now the governments have made their move, it is up to the private sector to capitalise on this agreement and boost trade and investment between both countries.”

The benefits of Cepa include enhanced market access, lower or eliminated tariff rules, simpler customs procedures, clear and transparent rules and rule-based competition.

Establishing wider Cepa networks with other countries would reinforce the UAE’s position as a global hub for gold and diamonds, Mr Al Kait said.

“Gold and jewellery constitute a big portion of the bilateral trade between the UAE and India, and through our Cepa networks [we are] committing ourselves as a country to respect all international rules when it comes to the goods delivery process,” he said.

“A few months ago we announced the [Good Delivery Standard] for gold.

“We think this process will help and protect traders and also clean the global markets from unwanted trade in this important sector.”

The Good Delivery Standard will be a publicly accessible system for monitoring imports and exports of gold.

It was formed to bring the UAE’s practices closer to those used by the Organisation for Economic Co-operation and Development.

The UAE and India signed Cepa in February and it came into effect on Sunday.

It is expected to boost non-oil trade between the countries to $100bn in five years from $60bn currently.

A new web page dedicated to Cepa provides information to companies and investors who wish to capitalise on the deal.