Duty concession on gold will be major concern for India under proposed FTA with Peru: GTRI

Duty concessions on gold pose a major challenge for India in the proposed free trade agreement with Peru.

Duty concessions on gold, which accounts for 80% of India's imports from Peru, is the most challenging issue for New Delhi under the proposed free trade agreement with the South American nation, a report said on Sunday.

Economic think tank Global Trade Research Initiative (GTRI) said that gold, a high-value product with low volume, attracts a 10% basic customs duty in India, and even minor tariff concessions could lead to a significant increase in imports.

India and the South American nation Peru are negotiating a free trade agreement to promote bilateral trade and investments between the two countries.

In such pacts, two trading partners either significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services.

The next round of talks is expected to start this week in Lima, Peru.

"Tariff concessions on gold, accounting for $1.8 billion or 80% of India's imports from Peru in FY23, is the most challenging issue for India," GTRI founder Ajay Srivastava said.

He argued that after tariff concessions under the India-UAE free trade agreement, gold imports from the UAE, India's second-largest gold supplier, doubled in 2023 compared to 2022.