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India’s UAE Gold Imports Surge as Tariff Gap Draws Scrutiny
India bought much more gold from the UAE during April-June 2026.
The UAE is not a gold-producing country, so the sharp increase has attracted attention.
Gold that meets the trade agreement’s origin rules can enter India with a 14% tariff.
Gold from other sources normally faces a 15% tariff.
Experts say even this 1% difference can matter because gold is expensive and trading profits are small.
GTRI wants the government to check whether the agreement is being used properly.
However, the available data does not prove that gold from other countries was sent through the UAE.
Another expert says India’s overall 15% duty may encourage illegal imports.
The issue comes as Prime Minister Narendra Modi has urged people to avoid unnecessary gold purchases to conserve foreign exchange.
India imported $649.4 million in gold from the UAE in June 2026, up 175.2% from June 2025.
UAE gold imports rose 124.8% to $3.14 billion during April-June, while imports from other countries increased 29.3%.
The UAE accounted for nearly half of India’s $3.53 billion quarterly increase in gold imports.
Qualifying UAE-origin gold receives a 14% tariff under the India-UAE FTA, compared with the normal 15% rate.
GTRI wants stricter rules-of-origin enforcement, while industry voices warn that high duties may encourage smuggling.
- Who
- India, the United Arab Emirates, the Global Trade Research Initiative (GTRI), Prime Minister Narendra Modi, and gold-market participants.
- What
- India’s gold imports from the UAE rose sharply, prompting scrutiny of the 1% tariff advantage under the India-UAE FTA.
- Where
- India and the United Arab Emirates.
- When
- In June 2026 and during the April-June quarter of 2026, compared with the same periods in 2025.
- Why
- Qualifying UAE-origin gold faces a 14% tariff instead of the normal 15%, while concerns also exist over gold demand, foreign-exchange conservation, and smuggling.
Review Concessions and Enforce Origin Rules
Reduce Duties and Keep Trade Legal
India-UAE tariff concession
Review Concessions and Enforce Origin Rules
GTRI says the 1% advantage can matter in bullion trading and wants the concession reviewed along with stricter enforcement of rules of origin.
Reduce Duties and Keep Trade Legal
The trade agreement permits a 14% tariff when gold meets the stipulated origin rules; the reported data does not prove that third-country gold is being diverted through the UAE.
Overall gold duty
Review Concessions and Enforce Origin Rules
Supporters of conserving foreign exchange, including Prime Minister Narendra Modi’s appeal to avoid unnecessary gold purchases, emphasize limiting gold demand and imports.
Reduce Duties and Keep Trade Legal
Harshal Dasani of INVasset PMS argues that a 15% duty may encourage smuggling and says restoring the duty to 6% could bring more gold into legal, GST-paying and hallmarked channels.
Industry impact
Review Concessions and Enforce Origin Rules
Reducing unnecessary purchases could help conserve foreign exchange if gold demand remains high.
Reduce Duties and Keep Trade Legal
The Chamber of Trade and Industry warns that weaker demand could hurt small retailers, manufacturers, and artisans, especially during the wedding and festive season.
Key facts
- June UAE imports
- $649.4 million in June 2026, up 175.2% from $235.9 million in June 2025.
- Quarterly UAE imports
- $3.14 billion during April-June 2026, up 124.8% from $1.40 billion a year earlier.
- Imports from other countries
- $7.87 billion during April-June 2026, up 29.3% from the previous year.
- UAE share
- The UAE’s share of India’s quarterly gold imports rose from 18.7% to 28.5%.
- Tariff difference
- Qualifying UAE-origin gold enters India at 14%, compared with the normal 15% rate.
- Quarterly increase
- India’s total gold imports increased by $3.53 billion during the quarter; the UAE contributed $1.74 billion.
- Industry forecast
- The Chamber of Trade and Industry said annual gold consumption could fall from about 800 tonnes to 500 tonnes if the slowdown persists.
Quotes
Harshal Dasani
Business Head at INVasset PMS
“We fully support the Prime Minister's objective of conserving foreign exchange. But the duty, not the buyer, is where the problem lies. At 15%, India is not stopping gold from entering the country — it is only deciding whether it arrives through customs or through a smuggler's pocket.”
businesstoday.in
Sources
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