Why India is the top gold trading partner of Dubai

February 10, 2009

Commodity Online
DUBAI: The trade partnership between India, the largest gold consumer in the world, and Dubai, the City of Gold, where gold jewellery buying is a rage, is increasingly being written in gold.

India has become the top gold trading partner of Dubai for the year 2008. While gold trade through Dubai rose 53 per cent to $29 billion in 2008 against $19bn in the previous year, the country that carried out the largest gold trade with the Emirates city was India.

Traders say gold trading between India and Dubai has boomed thanks to the fact that there are a large number of jewellery shops owned by Indian businessmen in Dubai, and across other Gulf countries.

"It is quite natural that India is the largest gold trading partner with Dubai. It is because Indians are the largest expatriates working in Dubai and other Middle East countries. Gold trading between Dubai and India is top on the charts of several trading firms and businessmen," said Abdul Aziz, a Dubai-based bullion dealer.

Major Indian jewellery chains in Dubai include Joy Alukkas, Atlas Jewellery, Sky Jewellery and Malabar Gold.

According to statistics released by Dubai Multi Commodities Centre (DMCC). gold exports from Dubai reached 371 tonnes in 2008, an increase of 29 per cent compared to 287 tonnes in the previous year.

For the 12 months ending December 31, 2008, about 674 tonnes of gold was imported into Dubai, up 21 per cent compared to 559 tonnes in 2007. More than 100 countries served as gold import partners to Dubai in 2008, led by the UK and India. During the same period, Dubai exported gold to a record 64 nations, with India and Switzerland topping the list of export partners.

Here are some interesting facts on the gold trade in Dubai:

**The total value of the gold traded through Dubai in the second half of 2008 reached $15.99bn, up 57 per cent compared to $10.16bn during the corresponding period in 2007 and up 22 per cent compared to $13.07bn in the first six months of 2008.

**Gold imports in Dubai rose 21 per cent to reach 674 tonnes in 2008 compared to 559 tonnes in 2007 while exports rose 29 per cent to 371 tonnes compared to 287 tonnes in the previous year.

**Gold jewellery demand in the UAE dropped from 99.8 tonnes in 2007 to 93.3 tones last year although there had been a 32 per cent increase in investment demand of gold —from 7.5 tonnes in 2007 to 9.9 tonnes.

**Dubai imported gold from more than 100 countries in 2008 and exported to 64 nations.

The World Gold Council (WGC) is one of the participants of the ongoing mega Jan 15-Feb 15 Dubai Shopping Festival. WGC’s promotion of gold in Middles East during this festival every year has earned Dubai the ubiquitous name ‘City of Gold.’

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