Gold Smuggling Passengers on the Rise in India

12_GoldSmuggling

Gold smuggling at airports in India is increasing. In Mumbai, almost 500 cases have been reported within the past four months.

Customs authorities in Mumbai confiscated more than 30 pounds of gold in three separate smuggling attempts on Saturday. Four people were arrested. The offences happened at Chhatrapati Shivaji International Airport (BOM) and Santa Cruz airport, which handles domestic flights.

The arrests are the latest in a series of failed gold smuggling incidents at airports throughout India. At Mumbai airports alone, the Customs department has documented almost 500 cases in the past four months.

Authorities report cases of gold smuggling have increased by a multiple of six this year. While there have been nearly 500 cases since April, a mere 79 cases were reported during the same period last year.

“Last year, between April and July, we had seized 61.46 kilograms [of] gold [135.49 pounds], while this year till July we seized 403.52 kilograms [889.6 pounds],” Milind Lanjewar, commissioner of customs for Airport Intelligence Unit (AIU) of Mumbai Airport, told The Economic Times.

Lanjewar attributed the rise in gold smuggling to the increasing cost of the precious metal on the world market, which today sits at $1,308.70 per ounce.

Legislation is also playing an important role in the issue. Last year, the government increased the import tax on gold bullion from 2 percent to 10 percent and ruled it mandatory to export one-fifth of all bullion imports. It was an attempt to slow a demand for gold, one which has skewed the country’s trade deficit.

Indian Prime Minister Narendra Modi was expected to change the gold policies in his first budget this year, but that didn’t happen. As a result, gold smuggling appears to be running rampant.

“We’ve seen cases in the past,” an official from the Directorate of Revenue Intelligence told The Times of India. “But the sheer magnitude now is alarming.”

Last week, customs officials at Chennai International Airport (MAA) in southern India detained four men, accusing them of smuggling gold from Singapore. One of the men allegedly tossed about 6 pounds of gold onto a baggage conveyor belt.

In the most recent cases at Mumbai airports, one involved two arrests after a passenger arriving from Dubai handed off 87 ounces of gold to a domestic passenger arriving from Goa.

In another case, a passenger arriving from Muskat in Chennai had 23.58 pounds of gold hidden in two flower garlands, which play a role in weddings and festivals throughout the subcontinent.

In the third case, a passenger arriving from Dubai was arrested with 52 ounces of gold.

[Photo: iStock]

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Comments (Showing 2 of 2)

  • fotographer at 11:06am August 13, 2014

    The main reason people are smuggling gold in to India, is that the tax the Indian goverment imposses on gold within India makes smugging a very profitable venture.
    If the goverment would reduce the tax on gold , you take away the need to do so.
    does one ever hear of people leaving India with huge amounts of gold?

  • gum at 7:32am August 14, 2014

    This is a great article, Gerry!

    It clearly shows how the steered public relations of several governments have changed the public opinion and the expectations.

    For a very long time and indeed to secure the freedom of international trade and the economy gaining momentum there was no tax burden for cash and cash equivalents. This free movement of capital then was subsequently slashed.

    At first there were artificially constructed and introduced measures against the so called “money laundering”. Later on the governments take more and more control over the cash flows. Especially since the population begins to forget what a freely convertible (and transportable) currency was:

    1.) Amounts of more than 10,000 Euros have to be declared – in the first stage of the reeducation.
    2.) Now India imposes taxes in the import of gold – which is a cash equivalent. And could be the archetype or blueprint for many other countries.
    3.) In the next years the former banker’s discretion is abolished. Governments will have access to any wire transfer in order to prevent criminal acts.
    4.) Italy has forbidden cash transactions exceeding 1,000 Euro.

    That said an import tax on gold as a cash equivalent is a clear warning signal. Therefore the alarm bells should ring!

    Viewing this political background I can’t see the people “smuggling” gold. They transport cash equivalents and then fall into the new trap of regulations. Which have seldomly been discussed during the campaign trails.

    That said this is no excuse for them breaching the actual regulations. But my contribution should be a wake up call.

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