LONDON, Sept 23: Indian measures to discourage gold imports are shutting the door on top exporter Dubai, where trade activity has fallen by as much as 60 per cent over the past two months, dealers said.

With gold the most expensive non-essential item on India’s import bill, the country’s government, in moves to curb a bulging current account deficit, hiked the duty on gold bullion imports three times this year to a record 10pc, while increasing the import duty on gold jewellery to 15pc.

Pakistan also suspended a duty-free gold import arrangement in August after purchases soared in the first half and topped $514 million in July alone, citing smuggling into India. The ban was lifted in September, but trade has remained subdued.

“Overall, Dubai gold trade is down by 60pc as a result of the Indian move and a swathe of paperwork and laws introduced by Pakistan recently, which make it very difficult to ship gold there,” said Abid Riaz, chief accountant at wholesalers ACM Gold in Dubai’s Gold Souk.

More than 25pc of the world’s physical gold passed through the emirate in 2012, with the value of gold traded reaching $70 billion.—Reuters