Dubai: Malabar Gold & Diamonds will oversee all of its non-India operations from a new base at Dubai’s Gold Souk Extension in Deira. It is set to open within weeks, and will set the stage for the jeweller to launch a retail presence in the UK, Australia, Canada and Bangladesh.
The decision to have the ‘Malabar International Hub’ in Dubai was speeded up by the UAE-India CEPA deal that went into effect from May 1, and has been of particular help to the gold and jewellery industry. (The CEPA (Comprehensive Economic Partnership Agreement) reduces/removes import duties and also smooths out trade and investment flows between the nations.) “With CEPA, it means we can bring in jewellery from India into the UAE without the 5 per cent import duty,” said M.P. Ahammed, Chairman of Malabar Group. “And that immediately works to gold importers’ advantage when they are based here.
“With that 5 per cent duty removed in full, we are in a position to use that in adding new international markets as well as improve our retail presence in current markets such as the US.”
The intention is to bring in more semi-finished jewellery from its production facilities in India to the UAE, where it operates two plants in Sharjah. The value addition will be done there and those pieces will head into stores here and elsewhere.
Other jewellers from India could take the same approach by widening the scope of their UAE operations, if they already have one, or set up base here to make full use of the 0 per cent import duty.
More jobs at Malabar
Expected to create an additional 300 jobs at its UAE operations, the Malabar International Hub will also offer bullion wholesale services, which the company has got approval for. The 28,000 square feet facility is split over a ground and 3 storeys, and is in addition to three showrooms the retailer has in the Gold Souk Ext. (There are another four stores at the Deira Gold Souq.) “The plan is to open the Hub later next month or early 2023 - once that happens, all of our existing non-India operations in the US and Far East will be managed from Dubai,” said Shamlal Ahamed, Managing Director for International Operations. “What UAE-India CEPA does is give Indian businesses consider an easier way to expand overseas through the UAE.”
The gold and jewellery trade in India too can source bullion from the UAE, for which the import duty has been cut by 1 per cent from the 12.5 per cent sourced from elsewhere. “We have already sent three consignments from here since May 1 - there’s a fixed annual quota of bullion that can be sourced from here as part of CEPA,” said Shamlal.
Home and away
Malabar has in these two years, despite Covid restrictions in India, have been regular with new store openings. Demand for gold in India has ben running high, despite shoppers having to deal with sharp upward swings in prices through this period.
As for overseas, Malabar had in the past talked about the need for high visibility in select international markets. Those plans may have been slightly delayed by the pandemic, but with the new international hub in Dubai, it’s back to expansion mode.