Dubai vs India: How Import Duties and Restrictions Affect Gold Prices

Kannada actress Ranya Rao’s arrest at Bengaluru airport with 14.2kg of gold has highlighted the issue of the gold smuggling and price differences between Dubai and India of gold. The actress is a stepdaughter of a senior IPS officer, allegedly hid gold bars in her clothing and even wore some of it to evade customs. The actress’s frequent trips to Dubai- which is four times in just 15 days raised suspicion leading to her arrest and a major gold seizure.

Price of gold in Dubai :

The price of gold in Dubai is much cheaper in India. The city has long been a hub for gold trading, often offering gold at prices lower than those in India. The several factors or the reason behind the price of the gold in Dubai happens to be :

Tax – free purchases: Dubai doesn’t impose taxes on gold purchases, allowing buyers to acquire gold at market rates without paying additional charges.

Absence of Import Duties : Dubai does not impose custom duties on gold, reducing the overall cost for customers.

Competitive Pricing : The gold market in Dubai is highly competitive, with the numerous dealers offering attractive rates to entice buyers.

While as, the Indian government has implemented various duties and regulations over the years. The customs duty on gold imports was redcued from 15 percent to approximately 6 per cent. This reduction aimed to curb smuggling and boost legal imports, making gold more affordable to customers.

The gold in Dubai maybe chepaer , bringing it into India is subject to specific regulations and duties:

Duty- Free Allowance:

Male Passengers can be allowed to bring up to 20 grams of gold, valued at a maximum of RS 50,000 without paying customs duty. Female passengers is permitted up to 40 grams of gold, with a value limit of RS 100,000, duty free.

Customs Duty on Excess Quantity :

Quantities exceeding the duty-free allowance are subject to customs duties, which vary according on the amount of gold imported. The reduction in import duties led to a significant surge in gold imports. In 2024 August, India’s gold imports reached a record $10.06 billion, driven by increased consumer demand ahead of the festive season. This surge in imports contributed to a widening trade deficit, which expanded to a ten-month high of $29.65 billion in the same month.