Higher Indian import duties and a weaker rupee are widening the price gap between gold in India and Dubai.
Dubai: Gold buyers travelling between the UAE and India are increasingly noticing that Dubai remains the more affordable market for jewellery and bullion, as higher import duties and a weaker rupee continue to push prices upward in India.
The price gap has widened significantly in 2026 after India raised customs duties on gold imports from 6 per cent to 15 per cent effective May 13, according to an ICICI Bank Global Markets report.
At the same time, the Indian rupee has weakened by around 7 per cent this year, further amplifying the impact of rising global bullion prices on domestic retail rates.
According to live rates, UAE gold prices on Tuesday stood at around Dh504.75 per gram for 22K gold and Dh545.25 per gram for 24K gold.
In comparison, India’s domestic gold prices have surged to nearly Rs145,650 per 10 grams for 22K and about Rs158,890 per 10 grams for 24K, reflecting the combined impact of higher import duties, currency depreciation, and elevated global bullion prices.
India’s gold prices are expected to remain elevated through the rest of 2026 and into 2027, according to an ICICI Bank Global Markets report.
The report forecasts local prices to trade in the range of ₹150,000 to ₹180,000 per 10 grams for the remainder of 2026, assuming an average USD/INR rate of 96.00.
For 2027, prices are projected to climb further toward ₹160,000 to ₹190,000 per 10 grams. The bank also noted that the domestic gold market has already risen by around 20 per cent year-to-date.
“This sharp growth stems primarily from a 7 per cent depreciation of the rupee so far this year, rising international rates, and the immediate pass-through of recent customs duty hikes,” the report added.
Analysts have also cautioned that Indian gold prices could rise by a further 2–3 per cent in the near term as markets continue to adjust to the higher customs duty regime. This ongoing upward pressure has further strengthened Dubai’s appeal for Indian travellers and expatriates looking to buy jewellery, coins, and investment bars.
Dubai has historically maintained a pricing advantage due to lower taxation, transparent pricing structures, and strong competition among gold retailers in the emirate.
The UAE dirham’s peg to the US dollar also adds an element of stability, helping shield buyers from currency volatility compared with rupee-denominated purchases, especially during periods of Indian currency weakness.
Travellers buying gold in Dubai must still factor in customs allowances and declaration requirements when bringing it into India. Even so, jewellers note that many buyers continue to find cost advantages in purchasing plain gold jewellery and bullion in the UAE.
Dubai gold prices have also remained volatile through 2026, tracking global market fluctuations. Historical data indicates that 22K gold in Dubai rose above Dh526 per gram earlier this month before easing back toward the Dh500 level.
Will prices keep rising?
Despite recent pullbacks, ICICI Bank Global Markets expects gold prices to remain supported over the medium term. However, they may move sideways in the near term due to a stronger US dollar and ongoing geopolitical tensions in West Asia.
“Gold prices may continue to rise as lower oil prices reduce the need for additional rate hikes by central banks, while demand for physical assets remains strong,” the report said.
The bank expects gold to trade in the near term between $4,400 and $4,600 an ounce, while warning that prices could briefly dip toward $4,200 if geopolitical tensions in the region intensify further.
Over the longer term, analysts remain bullish, projecting that gold could climb to $4,800–$5,000 an ounce by December 2026 and potentially reach $5,400–$5,600 by the end of 2027.
“The global US dollar could come under pressure in the medium term, increasing appetite for non-USD assets,” the report added, citing continued central bank buying and safe-haven demand for bullion. Higher prices are already starting to influence gold-buying patterns in India.
Is Indian demand slowing?
The report noted that India saw an 81 per cent surge in gold import value in April, but this was largely driven by higher prices rather than a genuine increase in physical demand. Import volumes, however, slowed to around 30 tonnes in March and April, compared with a monthly average of about 50 tonnes in 2025.
For UAE-based buyers, analysts expect Dubai to retain its relative pricing advantage as local gold prices remain more closely aligned with international spot rates, while Indian prices continue to reflect higher import duties and rupee depreciation.
This widening gap is likely to keep the UAE attractive for jewellery and bullion purchases, especially for travellers seeking lower premiums, greater product variety, and more transparent pricing.
Globally, analysts still view gold as being in a structurally bullish phase, supported by geopolitical uncertainty, central bank buying, and long-term safe-haven demand, even as short-term volatility linked to oil prices and US monetary policy continues.
