Union Commerce and Industry Minister Piyush Goyal said, on Friday, that the Free Trade Agreement (FTA) between India and United Arab Emirates (UAE) would be a ‘gift to the gems and jewellery sector’ as it will expedite growth for the G&J industry for several decades to come.

This will be the first bilateral free trade pact between the two nations.

“Today evening there will be another reason for this (G&J) sector to celebrate. It (the FTA) will be a gift that will ensure an expedited growth of this sector for many decades to come," Goyal said, while inaugurating IIJS Signature 2022 virtually.

India’s gems and jewellery sector is expected to achieve the $ 40 billion export target this fiscal, Goyal added.

The FTA is expected to give a boost to India’s gems and jewellery exports on the back of a possible waiver of the 5% (MFN) import duty on gold, platinum and silver jewellery by the UAE.

The UAE accounts for 80% of India’s plain gold jewellery exports and 20% of studded jewellery exports. According to GJEPC, exports to UAE have witnessed the highest fall of 41.50% between April 2021 and January 2022 on a year-on-year basis. India’s exports of studded gold jewellery declined from $1.04 billion in FY2017 to US$400 million in 2020-2021, which is expected to go back to the average level of $ 800 million if the duty is withdrawn, according to GJEPC.

The overall trade between India and UAE presently stands at $ 43 billion, and the FTA aims to expand it to $ 100 billion in five years, according to official estimates.