The disparity in prices, particularly concerning bullion, can be attributed to taxation policies. In Dubai, gold transactions remain untaxed, allowing dealers to sell gold with a reasonable profit margin. Essentially, Dubai prices align with the International Spot Gold price in USD, multiplied by the USD/DHS exchange rate, plus the dealer’s profit.
- Taxation: Dubai does not impose any value-added tax (VAT) on gold, while India imposes a 3% GST on gold jewelry and a 10% customs duty on gold imports. As of June 2022, India has increased the import duty on gold to 15%, making it more expensive to buy gold in India.
- Lower making charges: The making charges for gold jewelry in Dubai are lower than in India. Making charges are the fees charged by jewelers for the labor and other expenses involved in making the jewelry. In Dubai, the making charges are usually a fixed percentage of the gold price, while in India, they can be as high as 25% of the gold price.
- Better quality: The gold quality in Dubai is known to be better than in India, and there is a wider variety of jewelry designs available in Dubai.
- Strong gold market: Dubai has a strong gold market, with a high demand for gold jewelry. This competition among jewelers keeps the prices low.
Conversely, in India, the government imposes a 10% import duty on all gold imports. To this, jewellers tack on logistics fees, minting charges, and a 3% GST. Consequently, the Indian pricing equation incorporates the International Spot Gold price in USD, adjusted by the USD/INR exchange rate, and further augmented by the 10% import duty, logistics expenses, minting charges, and the 3% GST.
As a result, the cost of purchasing gold in India is approximately 15% higher than in Dubai. To illustrate, at the time of writing, the International Spot Gold price stands at USD 1881.9 per ounce, with a USD/INR rate of Rs. 64.5. A reputable bullion seller in Bangalore, such as Bangalore Refinery, offers 1 ounce of 24kt gold with a premium of 16.3% over the spot price, which is typically at least 11% more than Dubai’s pricing.
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8 responses to “Why is the gold in Dubai cheaper than India?”
Indian customs regulations allow for up to 20 grams of jewelry or an equivalent value of 50,000 rupees. However, due to fluctuating gold prices, carrying 20 grams of gold may not be feasible. It’s essential to note that if you choose to carry a 10-gram gold coin and declare it, you will still be liable for customs duties, as only jewelry is exempt.
Personally, I prefer shopping at Meena Bazaar over Gold Souk because Meena Bazaar offers lower making charges. I have not come across any instance of zero making charges on any type of jewelry.
An Indian passenger who has been residing abroad for over one year is allowed to bring jewellery, free of duty in his bonafide baggage upto 20 grams with a value cap of Rs. 50,000/- (in case of a gentleman passenger) or up to 40 grams with a value cap of Rs. 1,00,000/- (in the case of a lady passenger).
https://old.cbic.gov.in/resources//htdocs-cbec/customs/guide-to-travellers.pdf
I’m kind of confused about whether I can bring 20 grams of gold or 50,000 rupees’ worth of gold into India. It seems like 10 grams of gold cost 47,000 rupees in India, so I guess they only allow 10 grams. Is that how they figure it out?
Just a quick update for our community: During my recent visit to the Gold Souk in Dubai, I was pleasantly surprised to discover that 1 ounce PAMP gold bars are actually more affordable here than in the United States. I used to think that the US would offer better prices for bullion, but I stand corrected. On April 18, 2023, I found 1 ounce PAMP gold bars priced at just $2066.00 in the Gold Souk, whereas SD Bullion had them listed at over $2100. It’s a testament to the global dynamics of the precious metals market. Always good to stay informed
Folks, typically I invest around xxk rupees in India’s gold scheme, which offers the benefit of waiving the making charges if the gold’s purity is under 15%, though there’s still VAT to consider. I’ll be visiting Dubai soon and I’m interested in purchasing a gold chain or gold coin there. I’ve heard that Dubai offers jewelry with minimal making charges, and there’s no VAT, making buying jewelry the best option. Gold bars have no making charges and cost the same everywhere, so I’m puzzled as to why buying jewelry in Dubai is considered a poor investment when the expenses are lower than in India.
Could someone shed some light on this for me?
bringing gold to India– this question might be more relevant for the Indian community.
We’ve got some gold jewelry and a handful of small coins with us, so I was wondering about the tax or extra charges when it comes to carrying gold from the UAE to India.
I’d also love to hear about any personal experiences from fellow travelers. What kind of documents were requested when declaring it at the entry airports, and so on?
Just to share my recent experience: I arrived at MAA airport in India the day before yesterday, and right after collecting my baggage, there were these declaration booths. Once you passed through them, they singled out every passenger from the Dubai flight and took us to a separate booth for a metal detection test. So, if you’re planning on bringing gold, my advice is to declare it and go through the proper channels.
P.S. Before anyone gets any ideas, I can assure you it won’t be worth the trouble.
Hey everyone!
I’ll be swinging through Dubai on my way back to the UK and considering picking up some gold there. Any tips or thoughts on this?
Also, do you know if there’s any tax I should expect when bringing it back to the UK?
Hey there,
Avoid buying at the airport—they tend to hike up the prices. For a better deal, head to the central souq in Sharjah, specifically the Buhairah area. Look for a shop called “Al Khaimah” with a red sign upstairs. It’s a wholesale spot, so they offer the best rates.
In the UAE, their spot prices are slightly higher than the US rates, but this shop sells based on the US rates and with the lowest premiums. They usually stock PAMP and Valcambi, but if you want maximum value for your money, opt for the Emirates bars (the red plastic ones).
Take your time to compare prices around the souq—you’ll quickly see why this shop stands out with its great deals.