Increased Smuggling Of Gold In India Due To High Import Duty On The Yellow Metal

Increased smuggling of gold in India due to high import duty on the yellow metal has had interesting fallout in the neighbourhood. Pakistan's import of gold in the past one year has gone up by 400% while that in Nepal, Sri Lanka and Bangladesh have almost doubled. Directorate of Revenue Intelligence (DRI) officials say the unprecedented increase in imports to these countries without any entrenched cultural affinity to gold ornaments points to the fact that they are being brought in to be smuggled into India. Recently, DRI has even seized several consignments on Indo-Bangla and Indo-Nepal border where fake Indian currency note (FICN) networks are being used to smuggle gold.



India has been consistently increasing duty on gold to stem current account deficit for the past couple of years. From 1%, two years ago, it has gone upto 10% making smuggling of the yellow metal from neighbouring countries and South Asia, where duties range between 1% and 5%, lucrative.



According to DRI, Pakistan's import figures are a cause of worry as they correspond with high seizures within Bangladesh and on the Indo-Bangla border. Gold imports jumped by 102% in 2012-13 in Pakistan and, according to the Pakistan Bureau of Statistics, 6,745 kilograms of gold were imported in 2012-13, as compared to 3,267 kilograms during 2011-12.



This has doubled this year, say DRI sources. In Bangladesh, in the past two-three months alone, 400 kg of gold has been seized by local authorities. In Sri Lanka, the last financial year saw import of three tones of gold, but this year it has jumped to six tonnes with still a quarter to go for the financial year to end. "In Nepal too, several consignments of gold from China have been intercepted in the recent past," said a DRI official.



DRI DG Najib Shah said, "We believe this increased import in the neighbourhood is headed to India illegally." Sources said the import figures in these countries also do not correspond to exports out of these countries or the established consumption patterns.



In the past few months, over 50 kg of gold worth more than Rs 15 crore has been smuggled across the Indo-Bangla border alone. Elaborating on the modus operandi, sources said gold was bought in places like Dubai and Thailand and flown to Dhaka or Kathmandu where authorities are not all that vigilant. The consignment is then brought to the border and stored in safe houses.



"From here, human couriers are hired and given one or two bars to take across the border. It is difficult to detect such small amounts on a long border. These couriers make two to five trips a day and thus manage to carry considerable gold in a day. The gold is then collected and stored on the Indian side and transported to unscrupulous jewelers in cities," the officer said.

Source : timesofindia.indiatimes.com