Fresh gold trade between Dubai bullion exporters and Indian buyers has slowed as the Directorate General of Foreign Trade (DGFT) is yet to announce tariff-rate quota (TRQ) allocations for FY27 under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The uncertainty has left importers unable to plan purchases and stalled new export orders, according to industry executives.
The government has extended the validity of FY26 quota allocations until September 30 while legal disputes over the allocation process continue. Under the CEPA, eligible gold imports from the UAE receive a 1% point concession in customs duty, reducing the levy to 14% from the standard 15%. Industry executives said the absence of fresh allocations has affected business planning across the supply chain.
"There is very little licence for gold these days. The TRQ has not been issued yet," said Amit Gupta, Founder of Al Hayaat Overseas Trading, adding, “The gold importers are talking to the DGFT and other government agencies, but the policy has not been finalized.”
Exporters said Indian importers are reluctant to place fresh orders until there is clarity on the quota distribution.
“It has impacted us 100% because I cannot export,” said Monal Thakkar, Founder of Ashoka Global, adding, “When there is demand, I can sell. If there is no demand, I cannot sell.”
The uncertainty has also slowed trading through the India International Bullion Exchange (IIBX), which was introduced to bring greater transparency to bullion imports. Some importers still hold unused quota from the previous allocation cycle. Industry participants said those allocations are spread across several companies, making it difficult to execute large transactions.
"If I have to sell 10 kilos to 20 different buyers, I am not interested. Through IIBX, I would rather deal with a single 100-kilo order," Thakkar said.
Under the India-UAE CEPA signed in 2022, the DGFT allocates the annual concessional import quota to small, medium and large importers. The quota for FY26 was fixed at 180 tonnes. Industry sources said applications for FY26 crossed 450 tonnes against the available 180-tonne quota. The gap triggered disputes over the allocation formula, with some importers challenging the DGFT's eligibility criteria in the Rajasthan High Court.
The court has stayed part of the second tranche of FY26 allocations, affecting imports under the scheme. Some industry executives believe the delay also reflects the government's effort to moderate gold imports, which rank among India's largest non-essential imports and contribute to the current account deficit. The government has not stated that this is the reason for the delay. For now, the bullion trade is waiting for clarity on whether fresh FY27 allocations will be issued after the extended FY26 quota is fully utilised.
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