MUSCAT: Traders and jewelers within the Sultanate of Oman are exhibiting a degree of cautious optimism regarding the potential for an increase in the demand for gold among Indian expatriates, following the announcement by the Indian government to slash customs duties on gold and silver from 15 percent to 6 percent.
Local merchants are of the opinion that this reduction in duties could lead to a surge in gold sales, given the prevailing perception among expatriates that such gold from Gulf nations is superior in quality.
One jewelry trader on Ruwi High Street commented, “Even with the lower import duty, gold will still be approximately 4.9 percent more affordable in Oman when compared to India. This decrease in import duties renders gold and jewelry purchases in Oman even more appealing.”
Shamlal Ahamed, the Managing Director for International Operations at Malabar Gold & Diamonds, underscored the strategic advantages of this policy.
He stated, “The 2024 Union Budget contains several favorable provisions, especially the reduction in import duties on gold, which is anticipated to mitigate illegal gold imports and favor organized jewelry retailers. This policy is set to cultivate a more regulated and flourishing jewelry sector, thereby offering economic benefits to consumers and the market, thereby fortifying financial growth and stability. Furthermore, the budget’s comprehensive strategy promises to enhance our economic development, promoting sustainable growth and prosperity across the nation.”
A representative from Lakhoos Exchange, one of the premier exchange houses in the market for bullion and foreign exchange, articulated, “It would be a wiser decision to purchase gold in Oman and transport it back to India, following the reduction in duty. There remains a preference among Indian expatriates and Indian tourists for purchasing gold in Muscat, attributed to the belief in the metal’s purity and the extensive variety of jewelry designs available.”
Another wholesale trader in Muscat commented, “Gold prices in Oman and the Gulf region are likely to remain more economical than in India, even with the decrease in import duty.”
A senior official at a leading exchange house dealing in the bullion market remarked, “The execution of the most recent budget decisions should be closely monitored, but it is projected that there will be a notable uptick in gold sales, attributed to the significant reduction in customs duty from 15 percent to 6 percent. Despite fluctuating prices, there is a likelihood that individuals will continue to prefer purchasing gold from the Middle East, owing to the unmatched quality and diversity of options available.”
Mohammed S., the sales manager at a gold jewelry store, further commented, “While the decrease in import duty is likely to reduce the cost of gold in India, it still presents a more compelling advantage to acquire gold in Oman due to the extensive range of options available.”
However, Rafiq Hussain, a trader in Muttrah, issued a note of caution, indicating potential challenges in adhering to the latest budgetary measures.
He remarked, "The decrease in import duties represents a significant stride towards diminishing the prevalence of illicit gold imports into India. It is, however, premature to ascertain the complete ramifications this measure will have on the business sector among Gulf gold traders. Consumers will experience the advantage of legally acquired gold at competitive prices, which is expected to catalyze a substantial expansion in the organized retail sector of the Indian jewellery industry. This initiative is anticipated to enhance the Indian economy by fostering a more transparent and efficient jewelry sector."
While there is a prevailing sense of optimism among traders and jewellers, many have chosen a wait-and-see strategy to comprehensively grasp the effects of the lowered import duties.
The gold market in Oman stands poised for potential expansion, with traders and jewellers adopting a cautious yet hopeful outlook towards a possible surge in demand and a consistent interest from Indian expatriates and tourists.
