India announced a sharp rise in import duties on gold and silver to 15 per cent from 6 per cent. This decision has reshaped bullion buying, especially in the Gulf. The hike in import duty could turn the UAE’s jewellery market into its busiest summer season in years.
The decision came at a very sensitive time, when millions of Indian expatriates traditionally buy gold in the UAE before flying home for summer vacations or wedding travel.
The reasoning behind the higher import duty is to curb India’s import bill and conserve foreign exchange reserves. The widening price difference between India and Gulf markets has created fresh incentives for NRIs and tourists to buy jewellery in the UAE.
India Raises Import Duties
India’s higher customs duties on gold and silver aim to reduce non-essential imports amid global supply chain uncertainty, while keeping the current account deficit in mind.
The country’s gold import bill surged by 24.1 per cent to nearly $72 billion in FY26 despite lower import volumes, as international bullion prices rose more than 40 per cent over the last year.
Gold is the second-largest import item after crude oil, making it a major source of pressure on foreign exchange reserves whenever global prices rise sharply.
The move also follows Prime Minister Narendra Modi’s public appeal to avoid buying gold for at least one year and redirect savings into productive financial assets and nation-building investments.
Why is the Gulf market so exposed?
Dubai is one of the world’s largest gold trading, refining, and jewellery hubs. The bullion ecosystem is deeply tied to the Indian market. Indian expatriates, tourists, and traders account for a substantial portion of jewellery shopping in the UAE, especially before travelling to India during the festival and wedding seasons.
Many NRIs prefer buying gold in Dubai before travelling to India, where prices are generally higher due to import duties and taxes. The recent tariff increase has widened this price gap further.
Is Gold Really Cheaper in Gulf?
Yes. Once the revised rates are implemented, gold and jewellery prices in the UAE and the wider GCC region could be around 10 to 12 per cent cheaper than in India. The UAE’s lower taxation system further strengthens this advantage.
Investment-grade gold bars in the UAE are exempt from VAT, and tourists can reclaim VAT on eligible purchases. Making charges are also generally lower than in India. According to industry executives, this price gap has remained one of the Gulf market’s biggest advantages for years.
UAE Gold Rates
At the time of writing, the 24-carat gold rate in the UAE is AED 551.25 per gram, 22-carat is AED 510.50, 21-carat is AED 489.50, 18-carat is AED 419.50, and the 14-carat gold rate is AED 327.25.
What Travellers Must Remember?
The new customs rules have created a major price difference between jewellery and bullion products in India and the UAE. However, passengers travelling to India cannot carry quantities beyond the permitted allowance.
Passengers must declare gold on arrival and pay the applicable customs duty if they exceed the duty-free limit. Travellers should also carry invoices and purity certificates for customs verification. Due to the hike in import duties, bullion purchases in Dubai are likely to become significantly cheaper compared to previous years.
Legally Maximum Allowances
According to existing Indian customs rules, women can carry up to 40 grams of gold jewellery duty-free, while men can carry up to 20 grams. This means larger families can collectively carry greater quantities depending on family composition.
For example, a husband and wife can carry up to 60 grams combined. Adding an adult daughter increases the allowance to 100 grams. Similarly, a family with two men and two women can collectively carry up to 120 grams, while some larger family combinations could legally bring in 140 grams or more.
