Dubai: India’s Malabar Gold & Diamonds has consolidated all of its international operations in Dubai, through a swanky 28,000 square feet facility at the Deira Gold Souk Ext.
This will see the retailer – who has 70 plus outlets in the UAE – handle its Far East and North American operations through the new Dubai hub. Earlier, this was done through the company’s Singapore and US offices.
“With the UAE-India CEPA deal, it’s easier to source all the jewellery requirements from our factories in India at 0 per cent import duty into Dubai,” said Shamlal Ahamed, Managing Director for International Operations at Malabar. “This can then be re-exported to our network stores in the Far East and North America, with the benefit of this zero import duty into UAE.”
Another big win after the CEPA (Comprehensive Economic Partnership Agreement) has seen Malabar do jewellery making for third-parties, and pass on the benefits of the zero import duty. “These clients provide the designs and we make them at our facilities in India to those specifications,” said Ahamed. “The CEPA deal has opened up many possibilities for Indian jewellers with bases in Dubai and UAE.
Under CEPA, jewellery from India can be brought into the UAE without the 5 per cent import duty that is applicable on such products brought in from elsewhere. The UAE-India trade and economic deal came into effect May 1, 2022.
The gold and jewellery sector was always going to be a big winner when the deal was being finalised. On its part, bullion shipped from the UAE to India got a 1 per cent reduction in import duty from 15 per cent. (India’s import duty on finished jewellery is now at 25 per cent.)
Malabar, apart from the jewellery stores, also has two production facilities in the UAE, both in Sharjah. “These factories rely more on machine-led production of jewllery, which means basic designs meant for the mass market,” said Ahamed. “All of the heavy and intricate designer jewellery continues to be done at our India facilities.”
‘Make in India’
Malabar is spreading the word on ‘Make in India, Market to the World’, again something that has been made possible through CEPA. Apart from gold and diamond jewellery, other manufacturers with operations in India are using the UAE as a base to have it reach other markets, all at lower import duties. (The process works with products made in the UAE as well.)
On the retail side, Malabar will have 375 stores worldwide by year-end, including the 70 in the UAE. “As long as the import duty and additional taxes on gold jewellery in India shows a 15-18 per cent difference, the UAE gold trade will continue to be the natural place for Indians, expats and visitors, to buy,” said Ahamed. “CEPA only made this easier.”