Gold smuggling raises its head again in India

As gold prices have hit the roof in India, an unprecedented increase in the smuggling of the precious metal is being witnessed. Indian authorities are seeing a spike in undeclared gold being smuggled into the country.

The Directorate of Revenue Intelligence recently detained two airport personnel who allegedly helped smugglers take contraband gold out of the Mumbai international airport.

The Directorate has seized 5.5 kilo of gold in this instance and another 4 kilo just two days ago. In mid-August, the Directorate arrested a person at Jaipur airport with 2.5 kilograms of gold hidden in his socks. Investigations revealed that the accused had smuggled gold over 20 times in the past few months alone.

According to intelligence agencies, state gold seizures at airports have risen almost 10-fold in recent months with the increase in the import duty on gold, from 2% to 4%, announced by the then Finance Minister hailed as one of the main culprits.

Given the prohibitive prices of the yellow metal and the delayed monsoon, bullion traders were expecting gold imports to nosedive by 40% this year. The slump in imports is however being met through smuggling, spawning a revival in the trade, say traders.

Data from the finance ministry shows that between April and June this year, the customs authorities have seized 200 cases of smuggled gold worth $169 million (Rs 9.4 billion), up 272% as compared to $46 million (Rs 2.4 billion) in the previous year from 20 registered cases.