Muscat: The Indian government's recent decision to raise the limit on duty-free gold ornaments that can be carried by non-resident Indian (NRI) passengers will definitely prop up the sales of jewellers in Oman, like any other Gulf country.
The Indian government on Thursday, as part of the budget proposal, said male passengers can carry gold worth Rs50,000, and female passengers Rs100,000, which is against the earlier limit of Rs10,000 and Rs20,000, respectively.
Leading retailers, like Joy Alukkas, Malabar Gold and Atlas Jewellery, have all indicated that ever since the budget announcement, NRIs who are planning to travel in the coming days started buying more gold ornaments than ever.
"Now, NRIs have a better confidence. All our four outlets in Oman have witnessed better sales on Thursday, probably 25 per cent higher than a normal Thursday. Since it was the first day, people are gradually realising the liberal policy of Indian government. We expect more sales in the coming days, when more and more NRIs get to know about it," Najeeb K, Regional Head of Malabar Gold, told Times of Oman.
He noted that since India levies almost 7 per cent duty (6 per cent import duty and one per cent value added tax) on gold, NRIs who take gold ornaments with them can easily get this benefit when they sell the yellow metal back home.
Echoing a similar view, Jose Kakkassery Francis, Regional Manager of Joy Alukkas, said: "We have posted a 30 per cent growth in sales on Thursday, as compared to the same day of previous week. There is a rush in our outlets today as well.
We have cancelled the weekly off of all our staffers today to manage the sales." However, he added that the rush was partly due to an ongoing exchange offer for 22 carat gold ornaments.
As per the new limit, a female passenger can carry up to 40 grams of gold ornaments, while in the case of a male passenger, it is 20 grams.
Viju Raphael, Manager at Atlas Jewellery, also expressed confidence that the NRIs will buy more gold now.
He said there were complaints of harassment by customs officers in airports almost three months ago and with this revision, passengers have better confidence in taking gold back home.
Najeeb said the previous limit of Rs10,000 for men and Rs20,000 for women were fixed almost forty years ago, sometime in 1970.
The government, he said, could have increased it more in view of the phenomenal growth in gold prices in the international market. Now, 22 carat gold is costing around OMR18.9 per gram, which was less than OMR3.5 per gram 10 years ago.
Gold imports of India — the biggest user of yellow metal in the world — fell to 860 tonnes last year from an all-time high of 969 tonnes in 2011, according to the gold council. Demand for jewellery and investment fell to 864.2 tonnes in 2012, the second straight year of decline.
Housing loan benefit
The Indian government's budget also offered another concession to non-resident Indians (NRIs) who are going to buy a home for the first time. According to the proposal, a person taking a loan for his first home from a bank or a housing finance corporation up to Rs2.5 million during the period 2013-14, will be entitled to an additional deduction of interest of up to Rs100,000.
If the limit is not exhausted in 2013-14, the balance may be claimed in 2014-15. This deduction will be over and above the deduction of Rs0.15 million that is currently allowed for home loans.