As of 7 October 2026, garments imported into the United Arab Emirates from India carry a standard customs duty rate of 5%, but qualify for a preferential rate of 0% under the India–UAE Comprehensive Economic Partnership Agreement (CEPA). Clothing imports also carry a standard 5% import VAT levied on the CIF value plus customs duty. For a UAE VAT-registered importer, this VAT is declared through the reverse-charge mechanism in the tax return and reclaimed as input tax, resulting in a net cost of nil.
Customs duty rates under the India–UAE CEPA
The India–UAE Comprehensive Economic Partnership Agreement entered into force on 1 May 2022. Under CEPA provisions, UAE customs exempts qualifying goods of Indian origin from customs duties, compared with the standard 5% duty applied across the Gulf Cooperation Council on the CIF (cost, insurance, and freight) value. This preferential 0% tariff applies across diverse garment categories, provided the shipment satisfies official rules of origin and origin documentation is presented.
The table below compares the standard UAE tariff with preferential CEPA rates across woven and knitted women’s garments manufactured in India:
| Garment Type | Fibre and Construction | Standard UAE Duty | India–UAE CEPA Duty |
|---|---|---|---|
| Dresses | Cotton, woven | 5% | 0% with proof of Indian origin |
| Dresses | Viscose / rayon, woven | 5% | 0% with proof of Indian origin |
| Dresses | Polyester, woven | 5% | 0% with proof of Indian origin |
| Dresses | Silk, woven | 5% | 0% with proof of Indian origin |
| Dresses | Linen, woven | 5% | 0% with proof of Indian origin |
| Dresses | Cotton, knitted | 5% | 0% with proof of Indian origin |
| Dresses | Viscose / rayon, knitted | 5% | 0% with proof of Indian origin |
| Dresses | Polyester, knitted | 5% | 0% with proof of Indian origin |
| Kaftans | Cotton, woven | 5% | 0% with proof of Indian origin |
| Kaftans | Viscose / rayon, woven | 5% | 0% with proof of Indian origin |
| Kaftans | Cotton, woven — loose robe/cover-up cut | 5% | 0% with proof of Indian origin |
| Kaftans | Viscose or polyester, woven — loose robe/cover-up cut | 5% | 0% with proof of Indian origin |
| Kaftans | Silk or linen, woven — loose robe/cover-up cut | 5% | 0% with proof of Indian origin |
| Skirts | Cotton, woven | 5% | 0% with proof of Indian origin |
| Skirts | Silk, woven | 5% | 0% with proof of Indian origin |
| Skirts | Cotton, knitted | 5% | 0% with proof of Indian origin |
| Scarves and stoles | Silk, woven | 5% | 0% with proof of Indian origin |
| Scarves and stoles | Wool, woven | 5% | 0% with proof of Indian origin |
| Scarves and stoles | Cotton, knitted | 5% | 0% with proof of Indian origin |
| Tops and blouses | Cotton, woven | 5% | 0% with proof of Indian origin |
| Tops and blouses | Viscose / rayon, woven | 5% | 0% with proof of Indian origin |
| Tops and blouses | Polyester, knitted | 5% | 0% with proof of Indian origin |
Worked duty and VAT calculation
Calculating the landed tax obligation on apparel shipments requires assessing both customs duty and import VAT. Customs duty is calculated directly on the CIF valuation of the consignment, while import VAT is calculated on the CIF value plus customs duty.
Customs duty assessment:
- Standard GCC baseline: Under standard procedures without preferential trade documentation, customs duty equals 5% of the CIF value.
- Preferential CEPA baseline: When imported directly from India with a valid certificate of origin, customs duty is 0%, meaning duty equals 0.
Import VAT assessment:
Clothing imported into the UAE carries the standard 5% VAT rate. The statutory base for import VAT is the CIF value plus customs duty.
- Under standard import terms: Customs duty at 5% is added to the CIF value to establish the taxable import value. VAT at 5% is then calculated on that combined figure.
- Under CEPA preferential terms: Because duty is 0%, the taxable base is the CIF value alone without any duty addition. VAT at 5% is calculated on the CIF value.
Import VAT settlement methods:
How import VAT is settled depends entirely on whether the importer is registered for VAT with the Federal Tax Authority:
- UAE VAT-registered importer: A registered business does not pay import VAT at the border. The importer self-accounts for the 5% VAT under the reverse-charge mechanism in its periodic VAT return. The business reports the VAT due and simultaneously recovers the exact same amount as input tax. Consequently, the net financial cost of import VAT is nil.
- Non-registered importer: An importer not registered for VAT cannot use the reverse-charge mechanism. The non-registered importer must pay the 5% import VAT prior to customs clearance. The importer submits declaration details via form VAT301 on the Federal Tax Authority portal before goods are released.
Origin rules and customs clearance procedures
To benefit from the 0% duty rate under the India–UAE CEPA, shipments must comply with specific origin rules and clearance protocols:
- Origin rule for garments: Qualifying Indian apparel requires a change of tariff heading plus 40% value addition within India.
- Proof of origin: The clearing agent must submit an electronic CEPA certificate of origin issued in India featuring a verifiable QR code, generated through the Indian government’s eCoO platform. We arrange this certificate for every qualifying export shipment. Alternatively, should an Approved Exporter framework be utilised, an authorised Indian exporter may provide a Declaration of Origin in place of the standard certificate.
- Direct transport rule: Garments must be shipped directly from India to the UAE without transiting third-party territories. If a consignment transits through a third territory, preferential treatment remains applicable only if the goods remained under continuous customs control, did not enter domestic commerce or consumption, and underwent no operations other than unloading, reloading, bulk splitting, storage, labelling, or actions necessary for preservation.
- Customs declaration exemption code: On the UAE customs declaration, the declarant or authorised customs broker must apply for the CEPA preference by entering special code No. (56) in the exemption field and selecting the “Apply” option. Relevant origin documents must be submitted electronically, and original documentation retained for inspection upon request by the customs centre.
If any procedural aspect of your clearance or classification is uncertain, check with your customs broker.
Check your own garment
To verify the exact duty and VAT treatment for your specific garments, consult our dedicated calculation tool:
We manufacture women’s dresses, kaftans, skirts and scarves in India, and you can Talk to us about production for your collections.
Sources
Indicative information from official sources, written 24 October 2026. Rates verified on against the official tariffs. It is not a customs ruling; confirm with your customs broker before you rely on it.
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