Ranya Rao gold smuggling case: Why is yellow metal cheap in Dubai?

Kannada actress Ranya Rao was stopped at Kempegowda International Airport after authorities discovered gold bars valued at Rs 12.56 crore in her possession. Subsequent searches of her residence uncovered an additional Rs 2.06 crore worth of gold jewellery and Rs 2.67 crore in Indian currency.

Also Read: Ranya Rao smugging case: Actor had strapped gold to waist, calves at airport

In this context, let us explore why gold prices in Dubai are often lower than in India and why the Dubai gold market presents an attractive option for gold buyers.

Gold prices in Dubai are often lower than in India due to differences in import duties and tax policies. Currently, 10 grams of 24-carat gold in Dubai costs approximately Rs 72,430, while in India the same amount is around Rs 90,000.

Also in Dubai, one can buy gold without having to pay any taxes on it. These tax-free purchases make the city a gold-trading hub where traders can buy gold at market prices. There also exists healthy competition in the gold market for customers in Dubai as multiple sellers offer competitive prices to buy gold. Not only this, but Dubai also does not impose any import duties on gold, resulting in a lower cost for customers to buy it.

In India, according to reports, a custom duty of 6% is imposed on gold. Despite lower duties, there are limits on the amount of gold that can be brought into India without facing extra taxes.

However, it is crucial to consider customs regulations when bringing gold from Dubai to India. Male passengers can bring up to 20 grams (worth Rs 50,000) without incurring customs duty, while female passengers have a limit of 40 grams (worth Rs 1,00,000). This exemption applies only to jewellery, not gold bars or coins.

It is important to note that exceeding these limits will result in customs duty, which can range from 10% to 12% of the gold’s value.