Gold Silver Reports — India’s gold jewellery exports to the UAE have halved in the first two months of 2017 as the country has imposed a 5% import duty on gold jewellery. As a result, jewellers like Malabar Gold & Diamonds, Popley & Sons and others, who have a presence in the UAE, are ramping up their capacities there.
Demand for Indian artisans, who are skilled in handcrafted jewellery, has also increased. Many artisans who lost their jobs due to demonetisation are showing interest to relocate to the UAE.
Post imposition of 5% import duty, there has been a spectacular increase in production of jewellery in Jebel Ali free-zone and Sharjah. Indian jewellers who have set up base in the Middle East have swung into action to beat local manufactur ers. We have operations in UAE and we are ramping up our capacity. But Indian exports to the region has dropped by 50% or more since January.
“UAE has introduced a 5% import duty on gold from January 1, 2017. Hence, we imported the gold jewellery required to meet the UAE demand for the first quarter of 2017 in December 2016. Our import of gold jewellery for the UAE market went up 400% in December 2016. Most companies operating in UAE would have done the same. Hence the decline in imports in January and February,“ said MP Shamlal, managing director, (international operation), Malabar Gold & Diamonds.
Malabar Gold & Diamonds have manufacturing units in UAE and other GCC countries to cater to local demand. We have increased production from these units. This consists of machine intensive products normally sourced from Far East. As for Indian handcrafted and skilled-artisan intensive jewellery, the import will continue to UAE.
However, the Malabar Gold executive said that import of jewellery to UAE will reduce in future as bullion is exempted from import duty which gives an advantage for local manufacturing.