he shine of gold and jewellery markets in the GCC is to get added sparkle in the form of increased demand from Indian expatriates going on summer vacation following a proposal in the Indian budget to increase custom duty on gold and other precious metals from 10 per cent to 12.5 per cent.
“The proposal to increase the custom duty on gold and precious metals will spike gold prices in India, where prices are already at multi-year highs on the back of a weak rupee and higher international prices. However for Gold markets in the GCC, it will prove to be an unexpected boon during the holiday season,” said Joy Alukka, Chairman of Joyallukkas Jewellery Group.
Alukka said in India gold attracts a GST of three per cent. The proposal to hike the impart duty from 10 per cent to 12.5 per cent will there bode bad for India’s jewellery trade and buyers alike.
Shamlal Ahamed, Managing Director, International Operations of Malabar Gold, said the additional import duty for gold will hurt India’s domestic gold and jewellery market and promote illegal gold businesses which is detrimental to the economy. “This, however, will lead to further price advantage in prominent neighbouring jewellery markets like the GCC, Singapore, etc. The price advantage along with VAT refunds for tourists will definitely lead to the GCC and Singapore benefiting from jewellery tourism,” said Ahamed.