Customs rule likely to grind down Dubai gold trade to India

Rules effective on March 1

According to the new notification issued by India Customs, all air travelers to India need to fill a new detailed Customs declaration forms at airport effective March 1. As per the new regulation, all passengers flying to India must officially declare gold jewellery exceeding INR 10,000.

The customs clampdown is likely to hamper the flow of gold into the country from Dubai. Passengers fear that the furnished data can be used as a tool for harassment by customs officials. Even otherwise, increased paperwork is bound to create a negative sentiment among expatriates.

The Indian government allows passengers who have resided outside India for more than six months to bring free gold into the country. Female passengers can bring gold worth Rs 1 lakh, whereas the permitted limit for male passengers is Rs 50,000. This category of passengers is also permitted to bring up to one kilogram of gold after paying 10% customs duty and additional 2% cess duty. The passengers who have stayed abroad more than a year could carry any quantity of gold with them. However, they will be charged 36% baggage duty rate for gold exceeding the one kilogram limit.

The Non-Resident Indians (NRIs) prefer buying gold jewelry from Gulf countries to keep away from the 10 % import duty and the excessively high premiums in India. During recent times, gold sales in the Gulf countries have increased by 50 % - 60 %, bulk of the purchases being made by NRIs. The recently concluded Dubai Shopping Festival (DSF) had recorded strongest gold sales.

According to jewellers, the base value of INR 10,000 does not reflect the present gold value. The new regulation is feared to affect Dubai gold sales- a long-established market for retail jewellery.

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