By Manoj Nair, Associate Editor
Dubai: Buy gold here and sell in India — more expat Indians are using this option to generate some spare cash for themselves during the summer break. At the very least, the cash thus made comes in handy to foot the sky-high airline ticket costs to India at this time of the year.
This is so because of the widening gap between what a gram of gold in Dubai and other Gulf markets sell for and what the same would fetch in India. Apart from the sales tax and customs duty that is added at the retail level on gold sold in India, any weakening of the India rupee also pushes up the cost for a buyer in India. (The rupee is going for 67.1 to the dollar.)
This month, with gold averaging Dh153.29 a gram in Dubai, it was going for Rs2,889 in India (Dh158.21, based on the current exchange rate). Within those five dirhams or so, the individual can still get a decent payback. And this works to the advantage of the individual buyer-seller in the Gulf. And these are fuelling quite intensive purchases at local jewellery outlets.
“Compared with the last two years, there is a noticeable spike in the number of Indian shoppers of gold over the last two weeks, and buying with the intent to sell them in India,” said Abdul Salam K.P., Director at Malabar Gold & Diamonds. “One can make out from the nature of the purchases — there’s a lot of gold coins being bought as are basic jewellery, which can be sold easily back in the home country.
“There is no import duty on bullion imports into the UAE and these benefits are reflected in the showroom prices. Going forward, the jewellery sector will be keenly following the VAT regime — whether it will come into effect both at the import level and on the value-added jewellery sold at the stores.”