Mumbai: Some Indian jewellery exporters to the United Arab Emirates (UAE) are considering closing operations in India and shifting them to the UAE after the Emirates' recent increase in gold import duty to 5 percent from 0.36 percent.
The comments were made by Sanjeev Agarwal, CEO of Gitanjali Export Corporation, in a TV interview, according to CNBC-TV18.
India is known for its export of high value-added gold products, enabling firms to enjoy very high margins, says Agarwal.
The exporters are also considering moving all exports to another Gulf country, from where the goods can then be re-exported, he commented.
The UAE is a major market for India's jewellery exports, accounting for one-third, or $12.5 billion, according to the report.
The increase in in duty, will not only affect the country's reputation as a re-exporter of gold, but also Dubai's image as a famous shopping destination for gold jewellery buying.
Agarwal added that Gitanjali may not see a significant impact from the gold duty increase as only a small portion of its exports are to the UAE, with the majority being to the US, south-east Asia and Hong Kong.
