As silver imports from the United Arab Emirates continue to rise sharply, raising questions over compliance with rules, the Indian government is reconsidering specific stipulations in the comprehensive trade agreement signed with the UAE last year. According to senior commerce ministry officials, discussions are underway to potentially modify provisions related to import tariffs and local value addition norms under the pact.
Recent trade data reveals that Indian silver imports from the UAE grew by an astonishing 439% in July compared to the same period in 2023. The massive surge has rung alarm bells within policy circles, given suspicion that some products may not be adhering to rules stipulating a certain degree of domestic value addition in the exporting nation. The UAE is one of India's largest trade partners, with two-way commerce surpassing $83 billion in the fiscal year 2023-24.
Sources indicate India's primary concerns revolve around zero-tariff access being provided for gold, silver and other precious metals from 2025 onward under the agreement. There are calls to reassess this timeline and potentially impose duties on imports that fail to meet origin criteria. Critics argue unlimited duty-free imports pose the risk of large revenue drain and could displace domestic producers over time. The accord is currently under the lens as part of a periodic review process to address any implementation issues.
India's trade ministry stated the discussions with UAE counterparts aim to holistically examine concerns over rising inflows and potential rules violations. Any policy changes will be made with agreement of both sides to balance trade facilitation and national economic interests. The situation highlights how fast-evolving trade dynamics can put regional pacts under scrutiny and potentially lead to tweaks or amendments over their lifetime. Future actions on this front will be closely watched.
