India-UAE Gold Imports Delayed: Quota Allocations Unreleased

Gold imports from the United Arab Emirates to India are facing substantial delays as the Indian government has yet to release new tariff-rate quota (TRQ) allocations for the fiscal year 2027.

This hold-up significantly disrupts trade under the Comprehensive Economic Partnership Agreement (CEPA) established in 2022, which grants Indian importers a 1% customs duty reduction on gold from the UAE.

Understanding the Quota Mechanism

The Directorate General of Foreign Trade (DGFT) is responsible for announcing these crucial quota limits, but new allocations remain unissued.

To manage the immediate situation, the government has extended the validity of the previous fiscal year’s allocations until September 30, 2026.

• The administrative pause is partly due to ongoing legal challenges.
• A portion of the FY26 allocations faced a stay order from the Rajasthan High Court.

Impact on Bullion Trade and Markets

This uncertainty has created considerable logistical challenges for both Dubai-based exporters and Indian buyers.

Importers cannot plan purchases without knowing their future quota limits, effectively halting new import activities for many industry participants.

The situation has also adversely affected the India International Bullion Exchange (IIBX), designed to facilitate transparent and centralized bullion trades.

Industry stakeholders note that the current environment hinders the execution of large, efficient orders, pushing exporters to manage smaller, fragmented portions of remaining quotas.

Concerns are rising that this strain on legitimate trade operations could lead to gold trade shifting towards informal or unofficial channels to bypass administrative bottlenecks.

Key Figures and Future Outlook

Demand for gold under CEPA is exceptionally high due to the customs duty concession.

• In the previous fiscal cycle, applications for over 450 tonnes were made.
• This vastly exceeded the available 180-tonne limit.

Some industry observers speculate that the delay might be a deliberate government strategy to moderate gold imports and manage India’s current account deficit, though no official confirmation has been provided.

For investors and market participants, the critical next step will be the official release of the new TRQ allocations by the DGFT after September 30.

Until then, the primary risks include continued disruption of formal trade routes and uncertainty regarding the supply of gold in domestic bullion markets.