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In the coming weeks, sales will pick up in the run-up to Diwali, which is celebrated in October
Indian tourists and NRIs prefer to buy gold and jewellery in Dubai as prices are 15% cheaper than in their home country, mainly due to high taxes and duties.
Gold and jewellery retailers in Dubai say sales have reached pre-pandemic levels. They added that Indian buying will start to pick up in the next few weeks, on the eve of Diwali, which is celebrated in October.
“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% due to high tariffs in India. Visitors to the UAE can use up to 35,000 dirhams The cash value-added tax (VAT) rebate facility, which is another attraction,” said Abdul Salam KP, Deputy 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 prices are higher in India due to goods and services tax (GST) and import duties, etc.,” Alukkas said.
From June 30, 2022, India will increase import duty on gold from 10.75% to 15%, making foreign markets such as Dubai more attractive to NRI and Indian tourists to buy gold and jewellery.
According to Vinay Jethwani, partner at Meena Jewellers, jewellery buyers in India have to pay import duties and goods and services tax. “As a result, gold is cheaper in Dubai compared to India. Also, Dubai, the city of gold, is an ideal place to buy gold because of its wide range of designs and attractive production costs.”
Sales at pre-pandemic levels
Jethwani added that the past few weeks have been very positive for the jewellery trade. “Stable price declines have led to higher sales. Gold jewellery purchases are almost at pre-pandemic levels.”
Gold fell more than 3% on a weekly basis to a two-year low under pressure from a stronger dollar. Gold fell to its lowest level since Covid-19, pushing prices below key support at $1,700.
Alukkas said gold jewellery purchases have been growing steadily as the drop in gold prices over the past few weeks has led to increased foot traffic to stores.
Abdul Salam added that the jewellery market has shown a positive trend since the beginning of the year and has reached pre-pandemic levels in the UAE. “The flow of tourists to Dubai and the overall positivity of the economic factors in the region are helping to reactivate the market.”
Diwali sales rise
Abdul Salam added that this year is the first post-pandemic Diwali and the market is expected to be very optimistic.
Alukkas noted that gold jewellery sales picked up during Diwali, mainly because Indians were one of the main buyers of gold in the region. “Buying gold during this time is a habit. People buy gold for personal use as well as as a gift. We expect a significant increase in sales during the upcoming Diwali, as last year’s festivities were low-key due to the pandemic,” he said. Say.
Jethwani added that Diwali is one of our most important periods in terms of jewellery sales.
“We have regular customers saving money year round to buy their favourite jewellery during Diwali. As our customer base is predominantly South Asian, there is no doubt that sales of gold jewellery will pick up during Diwali. While most customers buy Gold is for their own use, but some people buy it as a gift. After two years, people will have a full-blown Diwali celebration. So the increase in sales will be huge,” Jetthwani added.
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