Gold smuggling into India is reaching epidemic proportions, as the government piles on more restrictions on top of the recent hike in import taxes to 8%. Customs officials in Delhi say that almost every passenger from Dubai is being frisked as standard procedure in an attempt to stem the tide of an estimated 10 to 12 kg of gold being smuggled into the country through that airport alone.
Nepalese security forces estimate 40 kg of gold is transshipped through their country from China to India daily, with the small nation lacking the resources or manpower to deal with the problem.
The fall of the rupee has made smuggling, an already lucrative trade, even more enticing to criminal syndicates, as well as those who may try to pull it off alone. The stifling of above-board gold imports by the Indian government has created a situation where commercial banks are selling 20kg of gold a day, but demand is an estimated 40-45 kg a day.
Most gold is smuggled from Dubai, where gold is 2.5 lakh/kg (almost $4200) cheaper than in India. This is more than double the price difference of less than 10 lakh last month, before the rupee began its rapid depreciation. This does not count the 8% import tariff.
Syndicates pay “mules” 50,000 rupee ($835) for every kilogram they successfully smuggle into the country, plus expenses. This still nets the criminals a 2 lakh ($3340) profit per kilogram.
Many smuggling arrests are made only because of tip-offs to police. Here are just some of the people arrested for smuggling since the first of the month:
- (Kochi) One man, carrying 1 kg in handbag
- (Kochi) One man, searched when he was seen walking funny, carrying 2 kg in his socks
- (Bangalore) One man with 10 100gr bars, from Singapore
- (Amedabad) One man who had taped a 1 kg bar under his luggage cart before passing through customs. A guard saw the bar fall off when the man was just feet from the exit, and arrested him.
- (Nepal) 5-man smuggling ring arrested in rented room with 16 kg of gold destined for India, which they had been smuggling in their shoes.
- (Nepal) Four men, including leader of smuggling ring, with 35 kg of gold hidden in a cavity in the front bumper of a freight truck.
- (Bangladesh) 25kg found taped under a seat in a passenger jet flying from Kuwait.