GOLD JEWELLERY EXPORTS TO UAE FELL 56% IN JAN, AFTER NEW LEVY

India’s gold jewellery export to the United Arab Emirates (UAE) fell by 56 per cent in January, due to a five per cent import duty there.

Data compiled by the Gems and Jewellery Export Promotion Council (GJEPC) showed the export at $148.1 million for January, from $334.1 million for the corresponding month last year. The import levy became effective on January 1.

The UAE, led by Dubai, is a gateway for India’s jewellery export, not only to Arab nations but for European countries. As a practice, Indian exporters dispatch consignments to Dubai for further export to European and Asian countries. The aim was to blend global contemporary designs for European and Asian consumers. After the new levy, however, manufacturers have started shipping their ornaments to consumers directly and the routing business (through Dubai) has stopped. “We need to explore new markets,” said Praveen Shankar Pandya, chairman of GJEPC.

Global customers in Dubai were enjoying tax relief on gold jewellery purchases. Hence, leading gold jewellery manufacturing countries in the world were routing their export consignments through Dubai. Following the new five per cent import levy, shipment of gold ornaments to Dubai has declined dramatically from all over the world.

“Since the effective date of January 1, gold jewellery exports to Dubai stopped for the first three weeks, due to uncertainty over the system of tax payment. It later revived in miniscule number. But, the declining trend is going to continue,” said Rajiv Popley, Director, Popley & Sons, a citybased gold jewellery manufacturer and exporter with showrooms in Dubai.

In fact, the share of Dubailed UAE markets shrunk to 37 per cent in January from 63 per cent in the corresponding month last year. The decline in UAE’s share pulled down India’s overall gold jewellery export in January to $398 million, a decline of about 25 per cent from the $530.3 million in the comparable month last year.