An import duty of 5% was levied on the gold jewelry by the UAE government which led to a sharp of fall of 56% in gold jewelry export from India to UAE. Data from the Gems and Jewelry Export Promotion Council (GJEPC) gives the figure of Indian gold jewelry consignments sent to UAE in January 2017 at $148.1 million which is less from the $334.08 million export of January last year.
The fall in exports has come at the same time as the UAE government’s import levy of 5%. Dubai is the hub for selling jewelry to Europe and many other countries for Indian gold jewelry exporters. Indian gold jewelry and jewelry from other countries is sent to Dubai and is blended and exported to European and other countries from there to give the buyer countries a great range of contemporary designs. However, after this levy, the manufacturers of gold jewelry are sending their consignments to the buying countries directly instead of routing them through UAE.
As per the World Trade Organisation (WTO) regulations, the import levy can be put up to a maximum of 25%. India charges a 15% import levy on the gold jewelry. Dubai had 0% import duty on gold jewelry before January 1st, 2017 and was increased to 5% after this which has led to this fall in gold jewelry exports from India.
The Dubai market along with the other UAE markets saw their share falling in the global markets from 63% in January 2016 to 37% in this January. UAE’s share fall has impacted the gold jewelry exports from India by around 25% in January 2017 to $398 million from $530.33 million in the same month of previous year.
Dubai is a massive market for jewelry with annual consumption of about 350 tons. The domestic consumption of gold jewelry in Dubai is strong although the routing of jewelry has because of less volume. The exporters have to sign an agreement to reship to other markets in the time limit for the routing business.
Original Source : http://www.importexportmarketing.in