Purchasing gold from Dubai offers significant cost advantages for Indian buyers, even when considering import duties. As of March 2025, gold in Dubai is priced at $887.63 per 10 grams, translating to Rs 77,281.46. In contrast, the same quantity in Mumbai costs approximately Rs 87,480, reflecting an 11.58% price advantage in Dubai. This price differential is primarily due to Dubai’s lower local taxes and a highly competitive market.
However, when importing gold to India, a 6% customs duty is levied based on the government-notified tariff value of $927 per 10 grams, amounting to Rs 4,842 per 10 grams. This still results in savings of Rs 5,360 per 10 grams compared to prices in Mumbai.
Why is gold cheaper in Dubai?
Gold prices in Dubai are typically lower than in India due to variances in import duties and tax regulations. Gold prices in Dubai are more affordable compared to India due to the absence of GST and goods tax on gold in the city.
Over the past two decades, Dubai has evolved into one of the leading global centers for gold trading and investment. The United Arab Emirates (UAE), as a whole, has also emerged as the world’s second-largest importer of gold by volume, trailing only behind India.
Additionally, Dubai’s world-class refineries allow for the cheap manufacturing of gold. Gold has always been tax-exempt in Dubai, contributing to lower prices. In contrast, India imposes a 3% GST and other taxes on gold, leading to prices that are 15 to 20% higher than in Dubai. The lack of advanced refining and storage facilities in India also contributes to the higher cost of gold in the country.
Legal framework around gold import
The legal framework surrounding gold importation into India is defined by the Passport Act of 1967. Passengers of Indian origin or those with valid passports are allowed to carry up to 1kg of gold back to India, with duty-free allowances of 20 grams for men and 40 grams for women, capped at Rs 1 lakh for female passengers.
Additionally, children can bring in 20/40 grams, depending on gender, with respective value limits of Rs 50,000 or Rs 1,00,000. These allowances are applicable to those returning after at least six months abroad, with short visits not exceeding 30 days, and provided they have not previously utilised these exemptions during brief visits. This policy facilitates a structured and legal way of importing gold from abroad.
Custom duty on gold
The import process in India is subject to regulations that mandate customs duty based on the declared tariff value, unaffected by the actual purchase price in Dubai. This helps maintain uniformity in tax collection and ensures the government benefits from gold imports. Gold’s tariff price was lowered to $927 per 10 grams on February 28, 2024, by the Central Board of Indirect Taxes and Customs. This reduction from $938 reflects efforts to balance revenue collection with encouraging legal imports, especially when considering the significant price gap between Dubai and Mumbai.
Where can you buy gold in Dubai?
The Dubai Gold Souk is a renowned gold market that hosts over 300 retailers selling gold jewellery, bullion, and coins to tourists and investors.
The Dubai Multi Commodities Centre (DMCC) is a Free Zone that facilitates the gold trade in Dubai, with 15,000 businesses offering services related to gold refining, trading, and logistics. The Almas Tower in the DMCC serves as a central hub for gold and diamond traders.
The Dubai Gold and Commodities Exchange (DGCX) provides a platform for trading gold futures and derivatives, offering tools for risk management and price transparency. In 2022, the DGCX reported a trading volume exceeding 7.6 million contracts.
Dubai houses some of the largest gold refineries globally, including Emirates Gold and Kaloti Precious Metals, to ensure the purity and quality of gold before it is traded in the emirate.
Overall, the allure of Dubai’s lower gold prices continues to attract Indian buyers, particularly those who can take advantage of duty-free allowances. With the current import duty structure, purchasing gold in Dubai remains economically favourable for Indian consumers, provided they adhere to legal import limits and procedures.