The new Deira Souk Ext. base will manage sourcing for operations in the Far East and North America.
Dubai:Malabar Gold & Diamonds of India has relocated all of its overseas activities to Dubai, where they now operate out of a posh 28,000 square foot facility at the Deira Gold Souk Ext.
With over 70 locations in the UAE, the retailer will now manage its activities in the Far East and North America through the new Dubai hub. Previously, this was carried out through the company’s headquarters in Singapore and the US.
“With the UAE-India CEPA deal, it’s easier to source all the jewellery requirements from our factories in India at 0 per cent import duty into Dubai,” Malabar’s Managing Director for International Operations, Shamlal Ahamed, said.“This can then be re-exported to our network stores in the Far East and North America, with the benefit of this zero import duty into UAE.”
Malabar’s ability to produce jewellery for other people while passing along the advantages of the zero import tax is another significant victory following the CEPA (Comprehensive Economic Partnership Agreement).“These clients provide the designs and we make them at our facilities in India to those specifications,” said Ahamed.“The CEPA deal has opened up many possibilities for Indian jewellers with bases in Dubai and UAE.
Under CEPA, jewellery from India can enter the UAE without paying the 5% import tax that is charged on similar goods imported from elsewhere. On May 1, 2022, the UAE and India trade and economic agreement went into force.
When the deal was finalized, the gold and jewellery industry was always going to be a major winner. On the other hand, the import tax on bullion sent from the UAE to India was lowered from 15% to 1%. (India currently charges a 25% import tax on finished jewellery.)
Malabar has two production facilities in the UAE, both in Sharjah, in addition to the jewellery shops.“These factories rely more on machine-led production of jewllery, which means basic designs meant for the mass market,” said Ahamed. “All of the heavy and intricate designer jewellery continues to be done at our India facilities.”
‘Make in India’
Malabar is promoting the slogan “Make in India, Market to the World,” which is yet another initiative made feasible by CEPA. Other manufacturers with activities in India are using the UAE as a base to have their products reach other markets, all at reduced import duties, aside from gold and diamond jewellery. (The process works with products made in the UAE as well.)
By year’s end, Malabar will have 375 shop locations, including the 70 in the UAE. As long as the import duty and additional taxes on gold jewellery in India shows a 15-18 per cent difference, the UAE gold trade will continue to be the natural place for Indians, expats and visitors, to buy,” said Ahamed. “CEPA only made this easier.”