SILVER IMPORTS IN INDIA
- ECONOMY
News:
Red flags over runaway silver imports
from UAE through Gift City
What's in the news?
●
Recently, The Global
Trade Research Initiative has flagged an issue that India’s imports of gold and
silver from the UAE had jumped 210% in
2023-24 to $10.7 billion.
Key takeaways:
●
In May, 87% of India’s global silver imports came
from Dubai at a reduced 8% duty and were cleared through the Gift City
exchange in Gandhinagar, which has been clearing all silver imports from UAE
since December 2023.
Import Duty on Silver:
●
India levies a 15% import duty on silver and only
allows institutions nominated by the Reserve Bank of India (RBI) and the
Directorate General of Foreign Trade (DGFT) to import the precious metal.
Exceptions:
●
However, the GIFT City exchange does not limit
imports to RBI/DGFT-nominated agencies, registers private traders, and has
found no rules of origin issues as flagged by customs elsewhere.
CEPA and Silver Imports:
●
Under the CEPA signed in
2022, India has agreed to reduce the
duty on silver imports to 0% over 10 years, subject to Dubai exporters
meeting the rules of origin conditions.
●
As the tariff becomes
zero over the next eight years, all silver imports will likely come from the
UAE, resulting in a revenue loss of ₹6,700 crore.
● This trade is driven solely by the tariff arbitrage offered by India.