Since the enforcement of the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) on 1st May 2022, the Indian gem and jewellery industry has seen significant growth and expansion in the UAE market. With cheaper gold, reduced costs, and increased competitiveness, Indian jewellers are reaping the benefits of the CEPA, leading to a surge in exports and retail sales. In this article, we explore the various ways in which the trade pact is benefiting Indian jewellers and transforming the industry.
The CEPA between India and the UAE that came into effect last year has brought about numerous benefits to various industries in both countries. One of the industries that has reaped the rewards of the CEPA agreement is the gem and jewellery industry.
The CEPA is a comprehensive and extensive agreement signed on 18th February, 2022, during a virtual summit between the Prime Minister of India, Shri Narendra Modi, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, the President of the UAE and Ruler of Abu Dhabi.
Commerce Secretary Shri Sunil Barthwal extended his congratulations to the people of India and the UAE on the first anniversary of the India-UAE CEPA’s implementation on 1st May, 2023. Shri Barthwal noted that both sides are continuing to work together to further improve Ease of Doing Business between the two countries. The Commerce Secretary highlighted the CEPA’s pivotal role in driving the growth of bilateral trade between the two nations over the past 11 months. He also mentioned that both countries are working together to enhance the Ease of Doing Business between them. The CEPA agreement came into effect on 1st May, 2022.
CEPA has made gold cheaper for Indian manufacturers, with 1% cheaper gold (capped at 140 tonnes) being made available from the UAE. At the same time, Indian jewellery exports to the UAE have become 5% cheaper in comparison to other competing nations like Malaysia, Turkey, etc. This reduction in costs has resulted in a 16.5% increase in Indian jewellery exports to the UAE in just one year. If this trend continues, the value of jewellery exports from India to the UAE is expected to reach pre-Covid levels of $9 billion in a short time.
His Excellency Shri Sunjay Sudhir, Ambassador of India to UAE, told GJEPC, “The historic India-UAE CEPA is a major trade agreement to transform bilateral economic, trade and investment ties and propel economic growth. The agreement also holds promise as a gateway for the Indian exporters to emerging economies in the Middle East and Africa. The gems & jewellery sector is among the industries which are poised to a gain considerably from CEPA.”
Even prior to the CEPA agreement, the UAE-India trade relationship has been thriving. However, the signing of the CEPA agreement has further facilitated trading between the two nations. GJEPC sought to capitalise on this favourable business environment by launching the India Jewellery Exposition Centre (IJEX) in Dubai, as a platform for Indian jewellers to showcase their designs, expertise, and products to the international market.
Shri Vipul Shah, Chairman, GJEPC, said, “In celebration of the first anniversary of the India-UAE CEPA, I’m happy to announce the launch of the India Jewellery Exposition Centre (IJEX) in Dubai. The GJEPC, with the support of the Ministry of Commerce & Industry, has taken the initiative to establish IJEX as a much-needed avenue for MSME jewellers to exhibit their products on a continuous basis in the Middle East market, which accounts for 40% of India’s gem and jewellery exports.”
With the Indian government providing a 1% discount on bullion import duty, and the UAE government waiving import duty on jewellery made in India, this mutually beneficial arrangement has allowed Indian jewellers to capitalise on the tax laws of both countries. Besides being one of the world’s most interconnected free ports, Dubai as a global business hub has created a more seamless trading experience for Indian jewellers.
Shri Sabyasachi Ray, Executive Director, GJEPC, noted, “The CEPA agreement has attracted big Indian jewellery retail chains like Tanishq, Malabar Gold & Diamonds, and Senco, who are setting up shop and expanding their presence in the UAE. The retail sales of Indian jewellery are growing at a remarkable pace, thanks to the CEPA agreement. This growth is a testament to the positive impact of the agreement on the Indian gem and jewellery industry.”
The CEPA agreement between India and the UAE has undoubtedly been a game-changer for the Indian gem and jewellery industry. With its significant reduction in costs, increase in exports and retail sales, and the opportunity to take advantage of the UAE’s free trade environment, Indian jewellers are now better positioned to compete on a global scale.
CEPA has not only strengthened the trade relationship between India and the UAE, but has also opened up new avenues for Indian jewellers to expand their businesses and reach new markets. With the industry poised for even more growth in the coming years, the CEPA agreement has indeed set the stage for a prosperous future for the Indian gem and jewellery industry.