Gold smuggling soars in India
Gold smuggling incidents in the current fiscal year have zoomed over nine times as compared to the same period last year, with 250 tonnes coming in illegally.
Posted: Monday , 11 Feb 2013
MUMBAI (MINEWEB) -
Cases of smuggled gold entering India are coming in thick and fast. Almost as fast as gold coins and jewellery pieces are flying off retail shelves.
* A brother-sister duo who arrived in Hyderabad by an Emirates flight from Dubai, were arrested for trying to smuggle in 8kgs of gold ornaments.
* Mumbai airport custom officials arrested a Somali national with a Dutch passport, for attempting to smuggle in 5kgs of gold.
* Eighteen kgs of gold were confiscated in Hyderabad and Chennai at their respective airports.
* Seven people including three Sri Lankans were arrested by Indian Customs officials at the Chennai airport trying to smuggle in 4kgs of gold into the country.
Despite India's best efforts to curb illegal gold imports, which included a boost to the nation's customs in 2012, gold smuggling has been rather rampant.
According to the All India Gems and Jewellery Trade Federation, India imported 950 tonnes in 2012. Of this, 250 tonne has come into the country through the illegal channel.
``In 2011, India imported over 900 tonnes of gold and none of it came through smuggling. The hike in customs duty has not stopped the import of gold into the country. It has only changed the route as smugglers earn a profit of around $3,719 (Rs 200,000) on every kilogram of gold smuggled into the country,'' said Federation Chairman Bachhraj Bamalwa.
The duty rate hike has not dampened demand, it has just enhanced the profit margin of smugglers, he added.
Finance ministry data shows $175 million (Rs 9.4 billion) worth of gold was seized from more than 200 cases of smuggling during April to July 2012. This was a 272% rise from the level of the previous year. Moreover, between 2006-07 and 2010-11, gold seizure was almost nil, data from the directorate of revenue intelligence shows.
In the first 10 months of 2012-13, India's Directorate of Revenue Intelligence seized gold worth $11 million (Rs 601 million) which is some 200kgs at the current price, and cracked 36 cases of smuggling.
The Directorate of Revenue Intelligence is an agency that monitors economic offences. Officers said the incidence of gold smuggling in the current fiscal year has grown by more than eight times as compared to the corresponding period in the previous year.
They added that spot gold prices in India are 5.7% higher than in Dubai. Typically, gold is smuggled into India from neighbouring Dubai and Thailand.
With every individual smuggling in an average of 5 kilo of gold per trip, the return on investment for each smuggler in one year amounts to almost 200%.