Gold smuggling into India hits new record highs

Gold smuggling into India hits new record highs

Delhi International Airport.

Customs officials at India’s main airports are failing to curb the increasing number of gold smuggling cases, as about 50 tonnes of the precious metal reportedly made it into the country only in the past 10 days.

According to a report in the Hindustan Times earlier this week, the peak is tied to the seasonal increased demand related to India’s Festival season when gold buying and gifting is almost a must.

At Delhi International Airport there have been 392 cases of smuggling since September last year, with almost 380 kg. of gold seized so far. In comparison, the number of cases in 2012-13 was nine.

“In the past two years, 166 people were arrested but almost all of them were carriers and are now out on bail. Arresting a carrier, who is used by the smuggler is easy but the racket cannot be stopped till the root is targeted,” a customs official, who was earlier posted at the airport, was quoted as saying.

The paper’s sources said that after arresting a person, the case goes to court where senior officials tend not to follow it.

Yet, most of the smuggling seems to be happening through land boundaries with Pakistan, Bhutan, Nepal and Bangladesh. There is as well some possibly coming in by sea from the Gulf States.

Import restrictions

The Reserve Bank of India (RBI) has been imposing lately several restrictions on gold imports in an attempt to curb demand for the precious metal and reduce the country's current account deficit. Currently the import duty on gold and silver remains unchanged at 10%.

In April the World Gold Council said India’s demand for gold was likely to remain high this year, despite government attempts to slow the flow of the precious metal to the South Asian nation.

India, which lost its position as the world’s top consumer of gold to China last year, imports about 963 tonnes of the precious metal each year.