Ranya Rao’s 14.2kg gold bust: Here's what makes Dubai the ultimate bullion destination

Dubai’s reputation as the “City of Gold” is under renewed scrutiny after actor Ranya Rao was caught smuggling 14.2kg of gold into India. Rao, the daughter of a senior IPS officer, was intercepted at Bengaluru’s Kempegowda International Airport (KIA) on March 3, with gold bars strapped to her body. 

The case has reignited concerns about Dubai’s role in India’s gold smuggling networks, where price differences and favorable trade policies make the emirate a hotspot for illicit gold trade.

Dubai has long been a global leader in gold trade, housing the Dubai Gold and Commodities Exchange (DGCX) and the historic Gold Souk in Deira, where traders, investors, and tourists flock. Over the past two decades, the UAE has emerged as the second-largest gold importer in the world, trailing only India.

The price advantage of buying gold in Dubai has fueled both legitimate trade and smuggling operations. Compared to India, gold in Dubai is 5% to 7% cheaper due to lower manufacturing costs, tax-free policies, and absence of import duties. These differences have historically made it lucrative for smugglers to illegally transport gold into India, bypassing high import duties.

Why Dubai’s gold market attracts buyers and smugglers

Price advantage:

• No import duties and lower taxes in Dubai make gold significantly cheaper compared to India, where import duties and GST increase prices.
• Gold in Dubai costs approximately ₹87,450 per 10 grams, while in India, the same quantity costs around ₹90,000 per 10 grams—a ₹2,550 price difference per 10 grams.

Purity and variety:

• Dubai is renowned for exceptional gold purity, with strict regulations ensuring authenticity.
• The market offers a diverse range of gold products, from jewelry to coins and bullion, sourced from India, Malaysia, Bahrain, Turkey, and other global markets.

Shopping experience:

• Dubai’s Gold Souk allows for price negotiations, making it even more attractive to buyers.
• The emirate’s strong regulatory framework ensures quality and security in transactions.

Tourist incentives:

• VAT refunds on gold purchases make it more attractive for foreign buyers.
• Travelers often see gold shopping in Dubai as part of their experience, boosting its appeal.

The Indian government has tightened regulations in recent years to curb illegal gold imports. Customs laws allow men to carry up to 20 grams of gold duty-free and women up to 40 grams. Any amount exceeding this limit incurs a 10%-12% customs duty.

This has led smugglers to resort to extreme methods—concealing gold in luggage, body cavities, or physically strapping it—as seen in the Ranya Rao case. With the latest Indian import duty revisions narrowing the price gap, Dubai's attractiveness as a gold source may decline in the future, but for now, its status as a gold trade hub continues to fuel smuggling networks.