MUMBAI: A hike in taxes on gold sales in India could stoke under-the-counter buying and drive up appetite for precious metal smuggled into the country, where millions of people store big chunks of their wealth in bullion and jewelry.
As part of a new nationwide sales tax regime that kicked in on July 1, the Goods and Services Tax (GST) on gold has jumped to 3 percent from 1.2 percent previously, with traders and buyers saying the move will likely force more transactions into the black market.
“Three percent is too much. I preferred to buy without receipts. The jeweller did not have any problem,” said a middle-aged buyer, who declined to be identified after making purchases on Monday at the country’s biggest bullion market, Zaveri Bazaar in Mumbai.
Smaller shops could be more inclined to sell without receipts, potentially hitting sales at big jewellers that keep to the rules, said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city Kolkata.
“Just to save 1 percent, some customers were earlier buying gold without receipts. With the 3-percent GST, now many more will be tempted to make unofficial purchases from small jewellers,” Ajmera said.
The tax hike could also encourage more smuggling into the world’s second biggest gold consumer, which buys almost all its bullion abroad.
Gold smuggling has been rife since India raised import duties on the metal to 10 percent in a series of hikes to August 2013, looking to curb demand to narrow a gaping current account deficit.
The World Gold Council estimates smuggling networks imported up to 120 tons of gold into India in 2016.
“The GST rate has increased the incentive to bring in smuggled gold. The government should reduce import duty and make smuggling unviable,” said Aditya Pethe, a director at Waman Hari Pethe Jewellers in Mumbai.
The country’s legal imports typically stand at around 800 tons a year, with the metal used in everything from investment to religious donations and wedding gifts.
“A lower import duty would increase legal imports and ultimately legal sales. Tax revenue would go up instead of going down,” said Daman Prakash Rathod, director at wholesaler MNC Bullion in the southern city of Chennai.
Black gold: India tax hike could boost illegal bullion, jewelry sales
Black gold: India tax hike could boost illegal bullion, jewelry sales
EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
- Aims to increase industrial sector’s contribution to GDP to at least 20% by 2025
- Move seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities
RIYADH: Electric vehicle manufacturer Lucid Motors has become the first global automotive company to join the Kingdom’s “Made in Saudi” program as the country continues strengthening its industrial capabilities.
The milestone grants Lucid the right to use the “Saudi Made” label on its products, symbolizing the nation’s focus on quality and innovation.
The strategy aims to increase the industrial sector’s contribution to the gross domestic product to at least 20 percent by 2025, tripling the current industrial base.
It also seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities, aligning with Vision 2030’s economic diversification goal.
“This is a step that represents a strong push to enhance the image of the national industry and attract investments and global companies, which consolidates the Kingdom’s position as a global center for innovative manufacturing,” Minister of Industry and Mineral Resources Bandar Alkhorayef said in a post on his X account.
In a separate statement, the minister said that Lucid Motors’ inclusion in the program underscores Saudi Arabia’s strategic transformation toward creating a fully integrated electric vehicle manufacturing ecosystem.
The minister added that this initiative aligns with the objectives of the National Industrial Strategy, which focuses on empowering promising sectors and attracting high-value investments in advanced industries.
Lucid’s participation in the program follows the launch of its first international manufacturing plant in Saudi Arabia in Sept. 2023.
Located in King Abdullah Economic City, the facility is the Kingdom’s first-ever car manufacturing plant and represents a key milestone in its efforts to build a domestic automotive industry.
The facility can currently assemble 5,000 Lucid vehicles annually during its first phase. Once fully operational, the complete manufacturing plant, including the assembly line, is expected to produce up to 155,000 electric cars per year.
Saudi Arabia is aggressively promoting the adoption of electric vehicles as part of its Vision 2030 strategy, which aims to achieve net-zero carbon emissions by 2060.
A critical target of the initiative is for 30 percent of all vehicles in Riyadh to be electric by 2030, contributing to a broader goal of reducing emissions in the capital by 50 percent.
To support the transition, the Public Investment Fund — a major backer of Lucid Motors — has been instrumental in establishing a domestic EV manufacturing sector.
In addition to its stake in Lucid Motors, PIF has launched Ceer, the Kingdom’s first locally branded electric vehicle manufacturer, as part of its efforts to bolster the industry.
Infrastructure development is also a core focus, with the Kingdom planning to deploy 5,000 fast chargers across Saudi Arabia by 2030 to facilitate the adoption of EVs.
Consumer interest in EVs is steadily growing, with over 40 percent of Saudi consumers considering purchasing an electric vehicle within the next three years, according to a 2024 report by London-based professional services network PwC.
Faisal Sultan, vice president and managing director for the Middle East at Lucid Motors, expressed the company’s pride in joining the program, saying: “We are delighted to join the ‘Made in Saudi’ program and have the honor of using the ‘Saudi Made’ label, which represents quality and excellence.”
He added: “We are committed to embodying the values of this national identity, such as sustainability, innovation, and excellence. With the increasing focus on electric vehicles in the Kingdom, we aim to deliver an advanced and unique experience to our customers.”
The minister said that Saudi Arabia has emerged as a central hub for electric vehicle production, supported by modern infrastructure, incentivizing policies, and a highly skilled workforce.
He also said that major players like Lucid Motors strengthen the Kingdom’s position as a global center for future-focused industries while contributing to increased local content, non-oil exports, industrial localization, and knowledge transfer.
Launched in March 2021, Saudi Arabia’s Made in Saudi program promotes domestic products and services, encouraging local consumption and boosting non-oil exports.
The move aligns with Saudi Arabia’s broader industrial strategy, which aims to increase the sector’s gross domestic product contribution to 20 percent by 2025 and drive investments in advanced industries.
It also supports Vision 2030’s goal of reducing the nation’s reliance on oil by fostering high-value sectors like electric vehicle manufacturing.
Tadawul maintains upward momentum, closes at 12,113
RIYADH: Saudi Arabia’s Tadawul All Share Index extended its upward trajectory for the second consecutive day on Tuesday, rising by 8.60 points, or 0.07 percent, to close at 12,113.29.
The benchmark index recorded a total trading turnover of SR7.71 billion ($2.05 billion), with 124 stocks advancing, while 110 saw declines.
In contrast, the Kingdom’s parallel market, Nomu, dropped 54.97 points, ending the session at 30,809.12. The MSCI Tadawul Index also gained ground, rising by 3.48 points to reach 1,514.39.
The standout performer of the day was Almoosa Health Co., which made its debut on the main market. The stock surged by an impressive 14.96 percent, closing at SR146. Other notable gainers included Al Mawarid Manpower Co. and Saudi Reinsurance Co., whose share prices climbed by 10 percent and 9.23 percent, closing at SR125.40 and SR63.90, respectively.
On the flip side, Al-Baha Investment and Development Co. saw its share price fall by 4.44 percent, ending the day at SR0.43.
On the announcements front, Filling and Packing Materials Manufacturing Co. announced it had signed a Shariah-compliant credit facility agreement worth SR50 million with Al Rajhi Bank to finance its working capital.
According to a statement on Tadawul, the 12-month credit facility is backed by a promissory note covering its entire value. FIPCO clarified that there are no related parties involved in the agreement. The company’s stock inched up by 0.44 percent, closing at SR45.70.
Meanwhile, LIVA Insurance Co. revealed it had received a Baa2 insurance financial strength rating with a stable outlook from Moody’s. The rating reflects the company’s strong capital adequacy, solid asset quality, and conservative investment strategy, alongside moderate reserve risk.
LIVA emphasized that the rating underscores Moody’s confidence in the company’s enhanced underwriting discipline and its ability to maintain profitability and growth within the Saudi market. A Baa2 rating is considered medium-grade, indicating a company’s acceptable ability to meet short-term debt obligations. LIVA’s stock gained 0.57 percent, closing at SR17.60.
Saudi Arabia eases domestic worker quotas for HR firms
RIYADH: Human resources firms in Saudi Arabia have welcomed the reform of a rule that required 30 percent of all employees to be domestic workers.
The change to the law, announced by the Ministry of Human Resources and Social Development, means that only firms with 3,000 workers or fewer now have to meet that threshold.
Those with a workforce ranging from 3,001 to 10,000 workers will instead be obligated to maintain a reduced quota of 20 percent, with that level dropping to 10 percent for companies with staffing levels between 10,001 to 15,000.
Firms with more than 15,000 workers are fully exempt from any domestic worker quota.
This policy shift is expected to balance supply and demand in the support workers sector, improving its legislative environment.
It comes at a time when Saudi Arabia’s human resources management market is experiencing rapid growth, and prior to this decision market research firm Horizon Grand View Research projected the sector would expand by a compound annual growth rate of 11.1 percent from 2024 to 2030.
Companies affected by the changes issued statements on Tadawul welcoming the new rules, with Mawarid Manpower Co. stating that “this decision will have an impact on the company’s business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce.”
Similarly, Saudi Manpower Solutions Co., also known a SMASCO, highlighted that “this decision aims to achieve a balance between supply and demand, thereby improving the legislative environment for the support (domestic) workers sector.”
Maharah Human Resources Co., which employs over 15,000 domestic workers, said that “it is not required currently to comply with any percentage for the household workers out of the total workforce.”
The company highlighted the cost-saving benefits of the new system, noting that “it is expected that this decision will have an impact on the company’s long-term business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce and reduce recruitment costs for household resources to ensure compliance with previous percentages.”
Additionally, the firm stated that the amendment “gives the company the ability to increase the workforce in the corporate sector to meet the growing demand without any constraints limiting that.”
The reform reflects Saudi Arabia’s broader efforts to modernize labor laws and streamline operations across key sectors.
Saudi Arabia sees 45% annual growth in domestic flight bookings: report
RIYADH: Saudi Arabia recorded a 45 percent annual growth in domestic flight bookings in 2024, fueled by the Kingdom’s expanding tourism offerings and increased connectivity through low-cost carriers.
According to Almosafer’s latest travel trend report, domestic room night bookings also saw 39 percent yearly growth. Additionally, combined domestic flight and hotel reservations contributed over 40 percent to the overall travel market, an 11 percent yearly increase.
The growth in domestic travel is largely driven by a broader range of destinations, accommodation options, and experiences that continue to attract leisure visitors to explore their home country. Family and group travel have been key contributors to this upward trend, with bookings in these segments surging by over 70 percent.
Commenting on the trends, Muzzammil Ahussain, CEO of Almosafer, said: “These travel trends align seamlessly with the government’s vision to enhance in-destination value and increase domestic tourism as part of Vision 2030.”
Cities such as Makkah, Riyadh, and Jeddah, as well as Al Khobar and Madinah, remain key attractions.
However, emerging destinations like Abha, Al Jubail, and Jazan, as well as Tabuk and Hail, are gaining momentum due to their distinct offerings, including mountain views, beaches, landscapes, and desert experiences.
“The growth of domestic tourism and the rise of family and group trips, with a focus on unique accommodation experiences and rich in-destination activities, showcase the success of the national agenda of building a thriving leisure tourism sector that contributes significantly to the economy,” Ahussain added.
Almosafer’s report highlights a notable shift in traveler preferences for accommodations. While luxury remains prominent, with 36 percent of room nights booked in five-star properties, budget-friendly stays in three-star or lower hotels now represent 35 percent of total bookings — a segment that has grown 100 percent for families and groups.
Alternative accommodations such as vacation rentals and hotel apartments have also gained traction, with family bookings rising 90 percent and group reservations increasing 60 percent, reflecting growing demand for flexible and affordable lodging options.
Low-cost airlines have also played a crucial role in the domestic travel boom. Increased capacity, expanded connectivity, and additional routes have made budget carriers more accessible to cost-conscious travelers.
While flight bookings grew by 45 percent, the average order value decreased by 7 percent, demonstrating how expanded options are enabling travelers to secure more cost-effective deals.
In-destination activities have become a cornerstone of travel value, with visitors increasingly opting for guided tours, adventure sports, and cultural experiences.
Booking behavior also evolved in 2024, with mobile platforms dominating the market. App bookings grew by 67 percent and accounted for 76 percent of total bookings, while web reservations contributed 17 percent, reflecting 7 percent growth.
Retail bookings, though representing a smaller 7 percent share, remain relevant for complex and higher-value itineraries as travelers seek in-person assistance for personalized planning.
Flexible payment options have further transformed the travel market. Buy now, pay later plans have gained popularity, while Apple Pay accounted for 44 percent of all domestic bookings processed in 2024, reflecting the growing adoption of digital payment methods.
Qatar’s non-oil business growth steady in December; Lebanon’s PMI at 8-month high
- Qatar’s labor market was a key driver of the country’s overall progress in business conditions
- S&P Global added that activity levels across Lebanon’s private sector economy fell in December
RIYADH: The growth of non-oil business activities in Qatar was steady in December, with the country’s purchasing managers’ index remaining stable at 52.9, unchanged from November, an economy tracker showed.
The latest report released by Qatar Financial Center and compiled by S&P Global said that the headline PMI figure for the fourth quarter of 2024 stood at 52.9, up from 52.0 in the previous three months and above the long-run survey average of 52.3 since April 2017.
According to the PMI survey, Qatar’s labor market was a key driver of the country’s overall progress in business conditions in December, with employment and wage increases reaching some of the highest levels on record.
The strong growth in non-energy business activities aligns with the broader economic diversification efforts across Gulf Cooperation Council nations, which continue to reduce reliance on oil revenues.
Earlier this month, S&P Global revealed that Saudi Arabia’s December PMI hit 58.4, driven by a sharp increase in new orders. The Kingdom’s PMI has remained above the neutral 50 mark since September 2020, indicating substantial expansion in the non-oil private sector.
In the UAE and Qatar, the PMI for December stood at 55.4 and 54.1, respectively.
“The headline PMI was unchanged at 52.9 in December, remaining above the long-run trend level of 52.3 and indicating a solid improvement in business conditions in the non-energy sector,” said Yousuf Mohamed Al-Jaida, CEO of QFC Authority.
According to the report, employment and wages have risen more quickly in Qatar’s non-energy business sector than at any other time in survey history, which reflects efforts to raise output, improve services, win new business, and address outstanding workloads.
Even though wage pressures remained strong in December, overall input price inflation eased further from October’s four-year high.
The survey added that Qatari firms continued to hold an optimistic outlook for the next 12 months in December, albeit slightly easing from November.
According to the analysis, Qatar’s Financial Services Future Activity Index rose from 62.1 in November to 68.3 in December, well above the long-run series trend of 63.6.
“The outlook for 2025 is strongly positive, continuing to support a booming labor market. New business growth generated a renewed rise in outstanding work during December, and companies continued to build inventories in expectation of sales growth in the coming months,” added Al-Jaida.
Business confidence in Lebanon rises
In a separate report released by BLOMINVEST Bank, compiled by S&P Global, the PMI of Lebanon hit an eight-month high in December, reaching 48.8, up from 48.1 in November.
The survey revealed that companies recorded their most optimistic assessment of the 12-month outlook in December as the Israel-Hezbollah ceasefire buoyed sentiment.
S&P Global added that activity levels across Lebanon’s private sector economy fell in December, although the pace of decline cooled to the softest seen since March.
“The BLOM Lebanon PMI for December 2024 improved for the second month in a row from the 44-month low in October (45.0) to record 48.8, as slower declines in new orders and new export orders resulted in a softer output contraction,” said Helmi Mrad, research analyst at BLOMINVEST Bank.
He added: “It is interesting to note that the surveyed companies were optimistic regarding the 12-month outlook, with the Future Output Index recording an all-time high of 61.8. This optimism is due to the ceasefire agreement between Hezbollah and Israel.”
According to the survey, the decline in new export business also cooled sharply in December, with the contraction being the slowest in 10 months. This trend also signaled a marked easing of the contraction in international client demand for Lebanese products.
