India and the UAE have enjoyed a strong trade partnership for decades, and it appears that it will continue to grow stronger as India prepares to open a new window for importing gold from the UAE. The move is designed to enable broad-based participation in the TRQ (tariff rate quota) process by making all imports available to interested parties, rather than restricting them to just manufacturing importers. This new policy is expected to boost India's gold trade with the UAE significantly.
The Indian government has always viewed the UAE as an important trading partner, and this latest move to increase the import of gold from the UAE is a testament to the strength of the relationship. The new policy is expected to attract a wide range of stakeholders, including jewellers, refiners, and traders, all of whom will be able to import gold from the UAE. By doing so, the Indian government hopes to make the TRQ process more inclusive and create a level playing field for all interested parties.
The TRQ process is designed to manage the import of gold into India by imposing a tariff on imported gold. The current TRQ for gold imports is set at 35 tonnes, with 20% of the quota allocated to the jewellery industry and the remaining 80% allocated to the manufacturing sector. The new policy will remove this restriction, allowing any interested party to apply for a share of the TRQ.
India is the world's second-largest gold consumer after China, with annual demand of around 800-900 tonnes. The country has a long history of gold consumption, with gold being an important part of Indian culture and tradition. However, India's gold demand has been affected in recent years by various factors, including high prices, import duties, and the COVID-19 pandemic.
The UAE is one of the world's largest gold trading hubs, with an established network of traders, refineries, and logistics providers. The country has a well-developed infrastructure for the gold trade, including a free trade zone that caters to the needs of the gold industry. The UAE's gold exports to India have been on the rise in recent years, with the country exporting over $10 billion worth of gold to India in 2021.
The opening up of the TRQ process to a wider range of stakeholders is expected to benefit both India and the UAE. The move will enable Indian importers to source gold from the UAE more easily, while also boosting the UAE's gold trade with India. The increased demand for gold from India is also likely to benefit the global gold market, as India is one of the largest consumers of gold in the world.
In conclusion, India's decision to open up a new window for importing gold from the UAE is a positive move that is expected to benefit both countries. By making the TRQ process more inclusive, the Indian government hopes to create a level playing field for all interested parties, while also boosting India's gold trade with the UAE. The move is also likely to benefit the global gold market, as India is one of the world's largest consumers of gold. With the strong trade partnership between India and the UAE, this new policy is likely to be the beginning of a new era of growth and prosperity for both countries.
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