New Delhi:
Kannada actress Ranya Rao’s arrest at Bengaluru airport with 14.2 kg of gold has put the spotlight on gold smuggling and price differences between Dubai and India. The actress, the stepdaughter of a senior IPS officer, allegedly hid gold bars in her clothing and even wore some of it to evade customs. Her frequent trips to Dubai – four times in just 15 days – raised suspicion, leading to her arrest and a major gold seizure.
Is Gold Cheaper in Dubai?
Yes, gold is cheaper in Dubai than in India. The city has long been a hub for gold trading, often offering gold at prices lower than those in India.
Several factors contribute to this price difference:
- Tax-Free Purchases: Dubai doesn’t impose taxes on gold purchases, allowing buyers to acquire gold at market rates without additional charges.
- Absence of Import Duties: Unlike India, Dubai does not levy import duties on gold, reducing the overall cost for consumers.
- Competitive Pricing: The gold market in Dubai is highly competitive, with numerous dealers offering attractive rates to entice buyers.
Historically, Dubai’s gold markets have thrived, serving as significant centres for the collection, sale, and trade of gold.
As of September 25, 2024, the price of 24K gold in Dubai was AED 313.66 per gram (approximately Rs 7,138.96 per gram), while in India, the price stood at Rs 8,225 per gram, as per Bayut.
India’s Gold Import Duties and Restrictions
To manage the economic implications of gold imports, the Indian government has implemented various duties and regulations over the years. In July 2024, the customs duty on gold imports was reduced from 15 per cent to approximately 6 per cent, Reuters reported. This reduction aimed to curb smuggling and boost legal imports, making gold more affordable for consumers.
Even with reduced duties, there are restrictions on the quantity of gold that can be imported into India without incurring additional taxes. Travellers must adhere to these guidelines to avoid legal complications.
While buying gold in Dubai may be cheaper, bringing it into India is subject to specific regulations and duties:
Duty-Free Allowance
- Male Passengers: Allowed to bring up to 20 grams of gold, valued at a maximum of Rs 50,000, without paying customs duty.
- Female Passengers: 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 based on the amount of gold imported.
The reduction in import duties led to a significant surge in gold imports. In August 2024, 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, as per Reuters.
