UAE: Why Indians prefer buying gold and jewelry in Dubai – News

Sales to pick up in coming weeks ahead of Diwali, celebrated in October

Indian tourists and NRIs prefer to buy gold and jewelry in Dubai as the prices are up to 15% cheaper than in their home countries mainly due to high taxes and duties.

Gold and jewelery retailers in Dubai say sales have reached pre-pandemic levels. Buying by Indians will pick up in the coming weeks ahead of Diwali, which is celebrated in October, they added.

“The price of gold in the UAE has been kept at the lowest level. Especially, when you compare it to the Indian market, the difference is 12% to 15% because of the high tariffs in India. Tourists to the UAE can use up to 35,000 dirhams The cash value-added tax (VAT) refund facility in the country is another attraction,” said Abdul Salam KP, vice-chairman of Malabar Gold and Diamonds.

John Paul Alukkas, managing director of Joyalukkas International Operations, said it was still much cheaper to buy gold in Dubai compared to India.

“Jewelry is more expensive in India because of things like Goods and Services Tax (GST) and import duties,” Alukkas said.

India has raised import duties on gold from 10.75% to 15% from 30 June 2022, making foreign markets such as Dubai more attractive for NRIs and Indian tourists to buy gold and jewelry.

Vinay Jethwani, partner at Meena Jewelers, said jewelery buyers in India have to pay import duties and GST. “Gold is therefore cheaper in Dubai compared to India. Also, Dubai being the city of gold is an ideal place to buy gold because of its wide range of designs and attractive fabrication costs.”

Jethwani added that the past few weeks have been very good for the jewelry trade. “The steady decline in prices led to higher sales volumes. Gold jewelry purchases are almost at pre-pandemic levels.”

Gold fell more than 3% on the week to a 2-year low under pressure from a stronger dollar. Gold fell to its lowest level since Covid-19, pushing prices below the key support level of $1,700.

Alukkas said gold jewelery purchases have been steadily increasing as store traffic has increased due to lower gold prices over the past few weeks.

Abdul Salam added that the jewelery market has shown positive trends from the beginning of the year and has reached pre-pandemic levels in the UAE. “Tourist flows to Dubai and overall positivity in economic factors in the region are helping to re-energize the market.”

Abdul Salam added that this year marks the first post-pandemic Diwali and the market is expected to be very positive.

Alukkas noted that gold jewelery sales picked up during Diwali, mainly because Indians are one of the major gold buyers in the region. “Buying gold is a habit during this time. People buy gold for personal use as well as to give as gifts. We expect a sharp increase in sales during the upcoming Diwali, as last year’s celebrations were muted due to the pandemic,” he said explain.

Jethwani added that Diwali is one of the most important times for us in terms of jewelry sales.

“We have regular customers who are saving throughout the year to buy their favorite jewelery during Diwali. Since our customer base is mainly South Asian, it goes without saying that sales of gold jewelery will pick up during Diwali. While most customers buy gold for their own use, there are also some customers who buy gold for gifting. After two years, people will have a full-scale Diwali celebration. Therefore, the increase in sales will be considerable, ’ added Jethwani.