Gold smuggling into India hits record highs
Gold smuggling into India has increased dramatically since the nation hiked its import duty on the yellow metal from 4% to 15% last year, and presently down to 10%, with authorities saying they have seized nearly four times more gold in the first quarter of the current fiscal year (April to June) than in the same period last year.
The Directorate of Revenue Intelligence (DRI) and the Indian Customs Department together seized 128 kilograms of smuggled gold in the Indian state of Gujarat alone, Resource Investor reported.
According to the article, the customs department at the Sardar Vallabhbhai International Airport said attempts of smuggling gold have more than tripled in the April-June period, compared to the same quarter last year. Officials have confiscated 20.3kg of gold so far, compared to only 6.1 kg they stopped from coming into the country in the same quarter last year.
The situation at the Delhi airport is even worse. Officials estimate they seized 352kg of gold by the end of 2013, 52 times more than the previous year. They said they believed that only a 12th part of all the gold smuggled through that airport is actually detected.
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.
Although it's impossible to calculate exactly how much gold was smuggled into the country in response to import restrictions, the Indian Finance Minister estimates that these activities may have added between one and three tonnes per month in the second half of 2013. The WGC believes this could be a considerable underestimate and that smuggling could have added as much as 200 tonnes throughout the year.