Boston, MA -- (SBWIRE) -- 06/09/2014 -- The Indian government made a number of significant changes to legislation involving gold in 2013, with these having a marked impact on demand for gold and gold jewellery in the United Arab Emirates. In January of the year, the government increased gold import duties from 3% to 6%, subsequently further increasing this rate to 10% by August. This legislation dramatically increased the price of gold jewellery in India and encouraged tourists and expatriates to buy these products in the United Arab Emirates instead. According to the World Gold Council, sales of gold to Indian consumers rose by 22% in 2013, with this group buying 77 tonnes of gold jewellery.
Damas was the clear leader in jewellery throughout the review period and accounted for almost 42% value share in 2012. This year also saw the company gain a further three percentage points in value share over the previous year, making it easily the most dynamic. The company continued to benefit from ongoing outlet volume expansion for its eponymous jewellery and watch specialist retailers chain, alongside strong marketing support. 2012 for example saw the company organise raffle draws for Diwali in the year with prizes including gold bars and Mercedes cars. The company is also well-placed to capitalise on the growing popularity of the United Arab Emirates as a luxury shopping destination for tourists, with strong brand awareness across the Middle East and much of South Asia and also a strong Emirati brand identity.
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The impact of Indian legislation on gold jewellery in the United Arab Emirates saw a strong media focus in the country at the start of the forecast period. January 2014 saw jewellers in the United Arab Emirates report their strongest gold sales in seven years according to gulfnews.com, with much of this rise linked to Indian consumers. However, there were concerns over a spate of smuggling arrests and confusing legislation in the United Arab Emirates. The country does not impose any restrictions but also requires travellers to declare quantities of gold worth in excess of AED100,000. Passengers are also advised to carry proof of purchase. Media coverage of arrests may therefore deter some Indian travellers or expatriates from buying gold. However, if the Indian government maintains high import duties and the 80/20 export rule, the United Arab Emirates is likely to continue to offer attractively priced Indian gold jewellery and to see strong demand among Indian consumers.
Discover the latest market trends and uncover sources of future market growth for the Jewellery industry in United Arab Emirates with research from Euromonitor's team of in-country analysts.
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