Dubai: UAE will reduce the import duty imposed on jewellery from India and in return India will cut the duty imposed on gold bars from the UAE. The import duty reduction is a part of the India-UAE Free trade agreement, which was signed in Delhi on Friday. The FTA will be in force from the first week of May.
India is a major importer of gold. India imports 800 tons of gold every year and has given Tariff rate quota (TRQ) of 200 tons, with tariff in perpetuity will be one per cent less, than whatever is the tariff charged to the rest of the world. This will provide s UAE 1 per cent price advantage in gold bars in gold trade with India.
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UAE has announced that it will give Indian jewellery zero duty access to the UAE market. At present, the gulf country is charging 5% duty on on Indian jewellery. This will boost the jewellery sector in India and thus the with international jewellery operations may shift to India from Singapore and Hong Kong.
As per estimates, Indian jewellery export can increase by 200 per cent in the next 3 years. The FTA or Comprehensive Economic Partnership Agreement (CEPA), aims at increasing the bilateral non-oil trade between the 2 countries to $100 billion annually. Currently, the trade stands at $60 billion. This is India’s first comprehensive trade agreement in a decade and under the deal, duty gets eliminated on 80 per cent of tariff lines.
The Union government has also decided to establish an Indian Institute of Technology (IIT) in the United Arab Emirates (UAE) as part of the India-UAE trade deal. This will be the first time an IIT would be established outside of the country. IITs are considered to be premiere technology institutes. At present, there are 23 IITs in the country.
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