UAE to review India’s concerns over silver import surge: Centre
- October 16, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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UAE to review India’s concerns over silver import surge: Centre
Sub : Eco
Sec : External Sector
Context:
- India raised concerns regarding a significant increase in imports of silver products, platinum alloy, and dry dates from the UAE during a meeting with officials from the Ministry of Economy of the UAE.
- The United Arab Emirates has agreed to examine the concerns raised by India.
Issues raised:
- The Indian government urged the UAE to ensure compliance with trade regulations under the Free Trade Agreement (FTA) that took effect on May 1, 2022.
- India asked UAE to verify compliance with the rule-of origin norms and ensure the rules are not circumvented.
Bilateral Trade:
- The UAE is India’s third-largest trading partner, with bilateral trade reaching $83.65 billion in the fiscal year 2023-24.
Surge in imports:
- India UAE CEPA allows unlimited imports of gold, silver, platinum and diamonds from the UAE into India.
- The Global Trade Research Initiative (GTRI) reported that gold and silver imports from the UAE increased by 210%, totalling $10.7 billion in 2023-24.
- The significant rise in imports has led India to call for a review of certain provisions of the FTA.
India-UAE Comprehensive Economic Partnership Agreement (CEPA):
- The Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE aims to enhance bilateral trade and investment.
- A critical component of this agreement is the Rules of Origin, which determine the nationality of a product and whether it qualifies for preferential tariff treatment under the CEPA.
Rules of Origin:
Rules of Origin are criteria used to define the national source of a product. Goods must meet specified criteria to qualify for reduced tariffs under the CEPA.
They play a crucial role in international trade by:
- Ensuring that the benefits of trade agreements are granted only to goods produced in the partner countries.
- Preventing the circumvention of trade barriers through third-party countries.
Tariff Concessions:
- India currently offers a 7% customs duty concession on silver imports and a 1% concession on 160 metric tonnes of gold.
- The GTRI claimed that many imports did not meet rules of origin norms and hence, did not qualify for concessions.
Proposed Designated Zone:
- India has requested that the Indian Jewellery Exposition Centre in Dubai be classified as a Designated Zone.
- This designation would allow domestic jewellery manufacturers, including non-registered entities, to benefit from concessional duties under UAE regulations.
Mutual Recognition Agreements:
- India also highlighted the necessity for both countries to establish mutual recognition agreements for professional bodies.
- This would enable professionals such as chartered accountants, lawyers, and nurses to provide services without the need for additional certification.