Dubai: Shoppers stand to benefit as gold jewellery prices in the UAE see a drop with Indian-made sets becoming more freely available in the local trade.
Some of the jewellery pieces imported from India are being sold here without even the making charges priced in, which makes them competitively priced to what is being made here, industry sources say. The increased volume of Indian-made jewellery into the UAE comes about after authorities in India came up with strict requirements that the country’s traders should export 20 per cent of their local bullion offtake.
“Prices in the UAE have seen an average of 2 per cent drop in the last two months — what’s happening is that the local wholesalers are buying more of Indian-made jewellery and this is then released to local retailers,” said Shamlal Ahmad, managing director of international operations at Malabar Gold & Diamonds. “In an intensely competitive retail environment, these lower price points are being passed on to the shopper.
“Because a small jewellery retailer here has access to the same designs and pieces that a bigger chain might have, it will be impossible to maintain a big difference between prices at different shops.”
Given the demographic mix in the UAE, the majority of gold jewellery consumed locally has an Indian design motif. Most of the big names have preferred to make them here or at some of their plants elsewhere in the Gulf.
Requirements
As it is, the UAE is the top destination for gems and jewellery out of India, with volumes totalling $14.37 billion (Dh52.7 billion) last year, and was followed by Hong Kong ($9.86 billion) and the US ($4.79 billion), according to an Indian industry grouping which is mounting a business-to-business trade show in Dubai.
There will be pressure on Indian jewellery firms to seek higher export returns given India’s 80:20 requirement, i.e., that 20 per cent of all their offtake should be shipped out. Only if they meet this requirement will they have access to the 80 per cent they can then sell into their domestic markets. India brought in this regulation as part of a series of measures to cool down demand for the metal and its various forms in its home market.
This strict requirement is why Indian jewellers are willing to ship out even foregoing the making costs. As long as they can meet the 20 per cent stipulation and get the export dollars, it serves the purpose.
But it remains to be seen whether these volumes can be maintained. Industry sources in Dubai do not doubt that a steady line can be established.
Every state in India has a unique culture which is well reflected in their jewellery preferences and it is hard — even impossible — to replicate all these in jewellery manufactured outside India,” said Chandu Siroya, managing director at Siroya Jewellers, which has both wholesale and retail interests. “As long preferences of people do not change [and these have sustained over decades], demand for Indian manufactured jewellery sustains.”
