Page 36 - Bullion World Volume 4 Issue 2 February 2024

Bullion World | Volume 4 | Issue 2 | February 2024

BULLION framework for settling bilateral transactions using their

respective currencies—Indian rupee and UAE Dirham
(AED). This system, covering current and specific capital
account transactions, aims to promote the use of these
currencies in various transactions. Concurrently, under
news (CEPA) effective since May 2022, both nations aim to
the Comprehensive Economic Partnership Agreement
boost bilateral trade to $100 billion within the next five
years. Notably, India, the world's largest gold importer,
has seen a substantial increase in rupee-based gold
imports, reaching $3.03 billion in December 2023—a
India is now paying for gold imports 156% surge compared to December 2022. Additionally,

from UAE using rupees gems and jewelry exports from India amounted to $2.90
billion last month, reflecting a 14.1% year-over-year
India and the United Arab Emirates (UAE) are engaging increase.
in rupee settlements for their bilateral trade, specifically
for gold and other commodities, as disclosed by an Source: https://www.kitco.com/news/article/2024-01-16/india-
anonymous senior Indian government official. This entails now-paying-gold-imports-uae-using-rupees
India using rupees for gold imports from the UAE, and
the UAE reciprocating by using the received rupees for
gems and Jewellery purchases from India. Facilitated
through the Special Rupee Vostro accounts mechanism
introduced by the Reserve Bank of India (RBI) in July
2022, this arrangement allows for the use of Indian
rupees in invoicing, payment, and settlement of exports
or imports.

In July 2023, India and the UAE signed a MoU to
establish the Local Currency Settlement System, a

Jewellery industry seeks duty cut, sops to boost exports

Gem and jewellery council urges raising PAN card said the upcoming Budget has a crucial role to play in
transaction limit to Rs 5 lakh shaping the trajectory of the gems and jewellery industry.
The All India Gem and Jewellery Domestic Council
Chairman, Saiyam Mehra, said with rising gold rates, the The government should reduce import duties on key raw
PAN card transaction limit should be raised to Rs 5 lakh, materials such as gold and diamonds to 4 per cent from
from the present Rs 2 lakh. A majority of consumers 15 per cent to help the industry, especially for the growth
in rural India buy gold as an investment, and sell it in of MSMEs, he said. Additionally, R&D funding would help
case of a medical emergency, he said. With the cash establish domestic manufacturing capacities, to reduce
purchase limit at Rs 10,000 per day under the Income the reliance on import of machinery in the coming years.
Tax Act, consumers cannot sell gold jewellery to meet These measures would not only foster innovation and
their needs. Hence, the daily purchase limit should be sustainable growth, but also contribute to a vibrant gems
increased to Rs 1 lakh per day. and jewellery sector, he said.

The jewellery industry is projected to hit $21.54 billion, Source: https://www.thehindubusinessline.com/markets/
growing at 6 per cent annually between 2023-27. Yogesh commodities/jewellery-industry-seeks-duty-cut-sops-to-boost-
Mudras, Managing Director, Informa Markets(India), exports/article67795514.ece

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