As per industry estimates, Turkish agents would have been buying more than $200 million worth Indian gold jewellery from Dubai.
Chennai: Owing to higher duties in Dubai and curbs on smuggling, Turkish buyers have started coming back to India to directly buy plain gold jewellery from the market. Exports to Turkey have witnessed significant growth in recent months and the industry believes this will continue to grow in the future.
Export of plain gold jewellery to Turkey zoomed multiple times to $54.31 million in April-December 2019 against a meagre $2.79 million during April-December 2018, as per the data of Directorate of General of Foreign Trade. Though in absolute terms, these direct exports are a small percentage of India’s overall gold jewellery exports, an opportunity has been opened for the industry to tap.
“Turkey is a gold-loving nation and it loves India’s hand-made plain gold jewellery. Till 2004-06 we used to directly export our jewellery to Turkey. But Turkey used to have and still has a high import duty of 17 per cent on gold jewellery. Hence later on, Turkish agents started buying Indian gold jewellery from Dubai as it was available duty-free. They would smuggle this jewellery into Turkey,” said Pankaj Parekh, former vice-chairman of the Gems and Jewellery Export Promotion Council.
However, after Dubai imposed 5 per cent duty and 5 per cent VAT on its imports in recent times, margins of these agents shrunk drastically. Further, of late, Turkish authorities also have become stricter with smuggling. This is bringing back the Turkish buyers to India.
As per industry estimates, Turkish agents would have been buying more than $200 million worth Indian gold jewellery from Dubai. But April-December exports account for just 25 per cent of this.
“We expect the Turkish exports to keep growing in the coming months and Turkey becoming a significant buyer in the future,” he said.