Pakistan Bans Gold Imports For One Month To Combat Smuggling To India

August 2nd, 2013 by

Indian-gold-smuggling

Citing damage to the rupee and capital reserves, the Pakistani government has announced an immediate ban to gold imports into the country, to last for the month of August. Pakistan has allowed duty-free import of gold since 2001, for the express purpose of manufacturing jewelry for export.

However, people have been abusing the law by importing the gold, then smuggling it into India for a large profit. As more people chase U.S. dollars in the domestic marketplace in order to buy gold, the price of dollars in rupee has risen substantially. The one-month ban on gold imports gives the government time to close the loopholes in the import law. The government was spurred to take action when June gold imports rose 176% to $40.2 million, compared to $14.6 million in June 2012. Imports for the first half of 2013 totaled R92.97 billion, compared to only R19.13 billion in H1 2012.

Seizures of smuggled gold by Indian border police and airport customs rose 365% in the first half of the year, compared to the same time frame in 2012.