Gold smuggling hits 50 tonnes in India as 15% import duty widens price gap

India, the world’s second-largest gold market, is seeing a significant change in the way gold enters the country. The increase in import duty from 6% to 15% has made official imports more expensive, prompting a sharp rise in unofficial supplies. At the same time, record gold prices are putting pressure on consumer demand.According to a World Gold Council report, gold smuggling is estimated to have climbed to around 50 tonnes in the September quarter, compared with just three tonnes in the same period a year earlier. The surge highlights how higher import costs have had unintended consequences for the market.Gold smuggling upGold demand recovered 24% sequentially to 162 tonnes in the previous quarter, supported largely by seasonal jewellery purchases. However, demand remained 29% below its year-ago level, as high prices continued to deter many buyers.Spending patterns told a different story.