Dubai, the City of Gold, has long been a haven for jewelry enthusiasts seeking exquisite pieces and competitive prices. But a curious trend has emerged: shoppers buying gold and jewellery in Dubai, only to sell them in other countries, particularly in South Asia. What drives this practice, and why does Dubai remain a top destination for gold buyers despite potential resale elsewhere?
Trust and Transparency: Industry experts emphasize the trust instilled in Dubai’s gold market. Strict regulations ensure quality and authenticity, unlike some countries where concerns about adulteration linger. This assurance is invaluable, especially for high-value purchases.
Price Disparity: The key driver, however, seems to be price. Jewellery in Dubai can be significantly cheaper than in other countries, due to factors like:
- No tax on gold purchases: Unlike nations levying taxes on jewellery, Dubai offers a tax-free haven for buyers.
- Lower making charges: Dubai jewellers often maintain fixed, lower making charges per gram compared to markets like India, where they’re calculated as a percentage of the jewellery price, leading to higher overall costs.
- Competitive international gold rates: Dubai’s prices usually align with global rates, offering further advantage.
Gold Case in Point: India
India, with its large gold-loving population, serves as a prime example. Here, prices can be 12-15% higher than in Dubai. Coupled with recent Indian import duty hikes on jewellery, the price gap widens further, incentivizing cross-border buying and selling.
Challenges and Regulations
Moving jewellery across borders comes with regulations. Travelers exceeding permitted limits face confiscation or customs duty, depending on the destination country’s policies. In India, for example, male passengers can carry jewellery worth Rs. 50,000, while females can carry Rs. 100,000.
Dubai’s Enduring Appeal
Despite potential resale opportunities, Dubai retains its allure for several reasons:
- Quality assurance: Stringent quality standards and a reputation for authenticity continue to attract global buyers.
- VAT refunds: Tourists can avail of VAT refunds at Dubai airports, further sweetening the deal.
- Wide variety and designs: Dubai boasts a vast selection of jewellery styles catering to diverse preferences.
- Convenient location: As a global travel hub, Dubai offers accessibility for international buyers.
Conclusion:
While price disparities motivate some cross-border jewellery trade, Dubai’s commitment to quality, fair pricing, and transparency remains its core strength. Whether buying for personal adornment or potential resale, the City of Gold offers a unique and trusted experience for discerning jewelry enthusiasts worldwide.