Indians are back to buying gold from Dubai. After the introduction of a 3% goods and services tax in India, buying gold jewellery in Dubai has become more lucrative.
Jewellers, with a presence in the United Arab Emirates and the Gulf region, said purchase of gold by Indians travelling to Dubai, NRIs and Indian expats living in the region has increased after the new tax regime was rolled out on July 1.
There is a perceptible rise in the sale of gold in the UAE market in the past two weeks and Indians are among the hot buyers, according to Ahammed MP, chairman of Malabar Gold & Diamonds.
"The immediate trigger is the revised tax structure for gold in India. UAE price continues to be much lower in comparison," Ahammed told ET. He said three categories of Indian buyers are buying more gold in Dubai -those settled in the Gulf, Indian tourists to the Middle East and transit passengers travelling from the US and Europe.
"Singapore and Sri Lanka are also witnessing increased buying interest for gold from Indian travellers," Ahammed said.
Jewellers estimate the increase at 5-10 per cent. "Shopping for gold in Dubai, especially with a 13 per cent difference, is more lucrative and this will divert some business from India to Dubai," said Rajiv Popley, director of Popley & Sons. Gold purchased in India is costlier by Rs 3,600 per 10 gm than in Dubai.
The gold price at Zaveri Bazar is quoted at Rs 29,210 per 10 gm, inclusive of import duty and GST, whereas the cost in Dubai is Rs 25,524 per 10 gm. Jewellery will remain costlier in India even after the planned imposition of 5 per cent VAT in the UAE from January 2018.
