In a recent update, the Indian government has imposed stricter regulations on the import of gold, particularly from the United Arab Emirates (UAE), under the Comprehensive Economic Partnership Agreement (CEPA). These new rules primarily aim to tighten control over who can bring gold into the country and prevent misuse of existing import channels.

Previously, under the CEPA between India and the UAE, gold could be imported from Dubai at a reduced customs duty—1% lower than the regular import duty. This made gold imports from the UAE a cost-effective option for Indian traders and jewelers.

However, with the recent change, only nominated agencies and qualified jewelers under the CEPA framework will be allowed to import gold from the UAE. In practical terms, this isn’t a drastic change, as banks that were already importing gold fall under the nominated agency category. Similarly, previously authorized qualified jewelers were also eligible to import under this system.

What’s significant now is the tightening of these permissions. Only those holding a valid Tariff Rate Quota (TRQ) license under CEPA will be allowed to continue importing gold. This move appears to be a response to loopholes that were being exploited—for instance, cases where gold was allegedly imported under the label of platinum, or as gold mixed with platinum, to circumvent duties or restrictions.

This issue was earlier highlighted in business media, drawing government attention to potential misuse. As a result, the government has made the rules more stringent. Although the relevant provisions were introduced in the February budget, they have officially come into effect from May 1st.

The key implication of this move is that gold imports from UAE can no longer take place through backdoor means or mislabeling. This could impact traders who were taking advantage of the earlier system but is expected to bring more transparency and control to gold imports in India.