Buying gold overseas seen to lose lustre as duty cut push domestic sales
Dubai gold odyssey for Indian shoppers, say Indian jewellers, who also operate stores in the UAE.
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The emirate had been a magnet for gold crazy Indians following a steep rise in customs duty in India in July 2022. Duty on imports of the yellow metal was more than halved in the fiscal 2024-25 budget.
The narrowed duty differential and consequently, lower prices in India after the budget means buying gold overseas is likely to lose its lustre significantly, jewellers told ET.
«Nearly 50% of our UAE business will shift to India as Indian tourists who would go to Dubai to buy jewellery will now shop in India,» said Joy Alukkas, chairman of Joy Alukkas Group, which has a big presence in Dubai. «Indian expats living in Dubai and others may continue to buy from the UAE.»
Indian-made jewellery, specifically gold jewellery made in Kolkata called 'Kolkatti' jewellery is popular among Indian expats in Dubai, and tourists from both India and other nations. The duty cut is expected to spur gold jewellery production in India and help gold artisans launch new designs, both in heavyweight and lightweight jewellery, luring consumers to buy gold from India.
The reduction in customs duty to 6% means the value-added tax (VAT) of 5% applicable to gold purchases in Dubai isn't sufficient to beat the labour cost differential. «Overseas gold is cheaper than in India is
