Dubai-based gold exporters are staring at prolonged uncertainty as India delays renewing tariff-rate quota (TRQ) allocations under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), reported Moneycontrol, even as gold prices in the emirate climb back toward this month’s highs, raising fresh questions about whether the stalled preferential route will push more trade into informal channels.
As gold prices rebound, Dubai exporters wait out India’s quota delay
India’s TRQ mechanism lets UAE-origin gold enter the country at a duty rate a percentage point below the standard rate applied to imports from other sources.
Exporters have found the preferential quota route virtually shut, even as regular-channel imports continued and overall gold imports fell in May. Official data shows India’s total gold imports were 795 tonnes in FY24 and 757 tonnes in FY25, with the TRQ mechanism accounting for only around 5% (40 tonnes) of that in FY24 and 18% (140 tonnes) in FY25 — while the FY26 allocation was set at just 8.58 tonnes.
The government previously pushed back the deadline for using existing TRQ authorisations, first to June 30 and, per later reports, again to September 30, as it reviews utilisation data to decide whether unused quota should be reallocated to other exporters.
Adding to exporters’ unease, Indian authorities are separately stepping up scrutiny of certificates of origin on UAE gold shipments, with regional trade offices now required to send monthly reports to the DGFT tracking import-export activity, amid concern that the concessional route is being misused.
Dubai prices climb back toward July’s highs
The quota freeze comes as gold turns more expensive in Dubai itself. 24-karat gold in Dubai stood at Dh493.50 per gram, up from Dh488.50 the previous day, as global bullion traded above $4,100 an ounce.
Prices have gained roughly Dh14.25 per gram over five trading days after touching a monthly low of Dh481.50 on July 16-17, with much of the rebound concentrated in the past three sessions.
Even so, rates remain below the Dh500 mark crossed last week and short of the month’s peak.
Informal trade risk builds
With the preferential quota largely unusable and open-market prices rising, industry sources warn the gap creates incentive for gold to move through unofficial channels rather than the CEPA-sanctioned route — echoing a pattern seen after earlier Indian duty hikes, when gold jewellery exports to the UAE fell sharply following a new import levy, prompting exporters to look for alternative routes and markets.
Traders on both sides are now watching whether New Delhi reallocates unused FY26 quota before the September 30 deadline, and whether the renewed scrutiny of origin certificates hardens into a full policy overhaul of the TRQ mechanism — a decision that will shape how much gold moves through Dubai’s official export channel versus informal routes in the months ahead.
