UAE Drives India’s Gold Import Surge Despite Higher Import Duty

India’s gold imports surged 47.1% year-on-year to $11.01 billion during April-June 2026, with imports from the UAE emerging as a major driver of the increase, according to a report by the Global Trade Research Initiative (GTRI).

GTRI said the government may need to review the preferential tariff available to gold imports from the UAE under the India-UAE free trade agreement (FTA).

The report comes days after Prime Minister Narendra Modi urged citizens to avoid unnecessary gold purchases amid concerns over the country’s rising import bill.

UAE Emerges As Major Driver

According to GTRI data, India imported gold worth $649.4 million from the UAE in June 2026, a 175.2% increase from $235.9 million a year earlier.

In contrast, gold imports from the rest of the world fell 17.7% to $1.32 billion from $1.60 billion.

As a result, the UAE’s share of India’s monthly gold imports climbed to 33% in June 2026 from 12.8% in June 2025.

The report said the entire year-on-year increase in June came from the UAE, with shipments from the country rising by $413.5 million while imports from other sources declined by $284.1 million.

The quarterly figures show a similar trend. Gold imports from the UAE more than doubled to $3.14 billion in April-June 2026 from $1.40 billion a year earlier, marking growth of 124.8%, per GTRI report.

Imports from the rest of the world rose 29.3% to $7.87 billion.

The UAE accounted for $1.74 billion, or nearly half, of the $3.53 billion increase in India’s total gold imports during the quarter, the report said.

GTRI Flags FTA Tariff Concession

The report said gold meeting the India-UAE FTA’s rules of origin can enter India at a 14% tariff, compared with the normal 15% rate.

GTRI noted that even a one-percentage-point difference can matter in high-value, low-margin bullion trading.

It said the government should examine whether the concession is encouraging trade diversion, including the possibility of gold originating in third countries being routed through the UAE.

"The government should review the one-percentage-point concession and strictly enforce the FTA’s rules of origin. Asking citizens to buy less gold will carry greater credibility if government also reviews gold and silver import concessions extended to UAE via the FTA," said Ajay Srivastava, founder of GTRI.