Delhi-based think tank Global Trade Research Institute (GTRI) has suggested tighter origin rules, a review of precious metal concessions under existing free trade agreements (FTAs), and the exclusion of gold, silver, platinum, and diamonds from future trade agreements to protect India’s trade balance and foreign exchange reserves.

The think tank’s observations come after Prime Minister Narendra Modi appealed to citizens to cut gold purchases to minimise the impact of gold imports on India’s foreign exchange reserves and trade balance.

Taking cue from Modi’s appeal, GTRI analysed trends in India’s gold imports in recent years and found that India’s gold bar imports rose sharply from $36.5 billion in 2022 to $58.9 billion in 2025. The trade research body said the tariff concessions on precious metals offered to Dubai under the India-UAE trade deal have significantly contributed to the recent surge in gold imports and urged the government to review its FTA policies.

India’s gold bar imports from the UAE rose from $2.9 billion in 2022 to $6.7 billion in 2023 and further to $16.5 billion in 2025. Dubai’s share in India’s gold imports increased from 7.9% before the FTA to 28% in 2025, it noted.

GTRI said the trend raises concerns because the UAE neither mines gold nor carries out major processing activities. “Much of the trade appears to involve routing gold from third countries through Dubai simply to benefit from lower Indian tariffs,” said Ajay Srivastava, founder of GTRI.

The India–UAE Comprehensive Economic Partnership Agreement (CEPA) came into force in May 2022. Under the agreement, India allowed gold imports from the United Arab Emirates at tariffs one percentage point lower than normal import duties through a Tariff Rate Quota (TRQ) system. The quota started at 120 tonnes annually and will rise to 200 tonnes from 2027, covering nearly 25% of India’s gold imports.

According to GTRI, the benefit became even bigger after India cut the normal gold import duty from 15% to 6% in the 2024 Budget. As a result, gold imported from Dubai effectively entered India at only a 5% duty. India also allowed private firms and jewellers to directly import bullion through the India International Bullion Exchange in GIFT City. Imports from Dubai have surged since then, the think tank said.

On May 10, Modi urged citizens to postpone non-essential gold purchases, including those for weddings, at a time of global economic uncertainty. India imports almost all the gold it consumes, making bullion imports a major burden on the economy.