India’s gold rush takes a Dubai detour as UAE shipments soar while rest of world imports fall

India’s gold import bill is rising sharply, but the surge has an unusual geographic pattern. Imports from the United Arab Emirates have jumped at a much faster pace than shipments from the rest of the world, putting the spotlight on the preferential tariff available to gold under the India-UAE free trade agreement (FTA).

According to the Global Trade Research Initiative (GTRI) and its founder Ajay Srivastava, the sharp increase in UAE shipments warrants a review of the tariff concession, particularly as Prime Minister Narendra Modi has urged citizens to avoid unnecessary gold purchases.

Gold imports jump 47% in April-June

India’s gold-bar imports rose 47.1% to $11.01 billion in April-June 2026 from $7.49 billion in the year-ago period.


Also Read: Unless necessary, do not buy gold, reiterates PM Modi on Instagram; jewellery stocks slide

The increase came despite the government raising the import duty on gold from 6% to 15% on May 13. Higher international gold prices also contributed to the rise in the value of imports.

However, GTRI’s analysis of country-wise data shows that the UAE was a major contributor to the increase.

UAE imports surge while rest of world declines

India imported gold worth $649.4 million from the UAE in June 2026, up 175.2% from $235.9 million in June 2025.

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

The divergence meant that the entire net increase in India's gold imports in June came from the UAE. Imports from the UAE increased by $413.5 million, while imports from all other countries combined declined by $284.1 million.

The UAE’s share of India’s monthly gold imports consequently rose to 33% in June 2026 from 12.8% a year earlier.

UAE accounts for nearly half of quarterly increase

The pattern was equally stark during April-June 2026.

Gold imports from the UAE more than doubled, rising 124.8% to $3.14 billion from $1.40 billion in April-June 2025. Imports from the rest of the world rose 29.3% to $7.87 billion from $6.09 billion.

India’s total gold imports increased by $3.53 billion during the quarter. Of this increase, the UAE alone accounted for $1.74 billion, nearly half of the total rise.

The UAE’s share of India’s quarterly gold imports increased from 18.7% in April-June 2025 to 28.5% in April-June 2026.

GTRI said the figures show that the UAE was "not merely another supplier" and had become a "principal driver" of the increase in India’s gold import bill.

One percentage point tariff difference comes under scrutiny

The sharp increase in imports has brought the India-UAE FTA’s gold tariff concession into focus.

The UAE is not a gold-producing country. Under the trade agreement, gold that meets the agreement’s rules of origin can enter India at a 14% tariff, compared with the normal rate of 15%.

GTRI has argued that even this one-percentage-point difference can matter in the bullion trade because gold is a high-value commodity with relatively low margins.

The lower tariff, according to the analysis, could encourage importers to "source or route more gold through the UAE."

GTRI flags possibility of trade diversion

The key concern is whether the tariff preference is encouraging trade diversion, with gold originating in third countries potentially being routed through the UAE to qualify for the lower duty.

GTRI has therefore called for the government to examine whether the preferential tariff is contributing to the sharp rise in UAE gold imports and whether the FTA’s rules of origin are being properly enforced.

The analysis argues that "the government should review the one-percentage-point concession and strictly enforce the FTA’s rules of origin."

This does not establish that third-country gold is being routed through the UAE. However, the unusually rapid growth in UAE imports, particularly against the decline in imports from the rest of the world in June, has raised the issue for scrutiny.

Modi’s gold appeal adds another layer

The issue comes at a time when the government is concerned about India’s rising gold import bill.

Prime Minister Modi on September 1 appealed to citizens to avoid unnecessary gold purchases. Against that backdrop, GTRI has questioned whether maintaining a tariff concession that may be encouraging additional imports through the UAE is consistent with the government’s broader objective.

"At a time when the Prime Minister is asking citizens to avoid unnecessary gold purchases, continuing a tariff concession that may be accelerating imports appears inconsistent," the analysis said.

GTRI has also called for the government to examine gold and silver import concessions extended to the UAE under the FTA.

The broader argument is that asking consumers to buy less gold would carry greater weight if the government simultaneously reviewed the trade concessions that could be encouraging gold imports.

India’s gold imports: UAE versus rest of world

US$ million	June 2025	June 2026	Growth	Apr-June 2025	Apr-June 2026	Growth
UAE	235.94	649.41	175.24%	1,396.90	3,140.60	124.83%
Rest of world	1,603.14	1,319.01	-17.72%	6,088.96	7,870.43	29.26%
Total	1,839.08	1,968.42	7.03%	7,485.86	11,011.03	47.09%