Smuggled gold Rs 8,000 cheaper per 10g; 100 tonnes may enter India this year
India's gold market is seeing a surge in smuggling due to high import duties, with estimates suggesting over 100 tonnes may enter illegally this year. This grey market activity is undercutting legitimate jewellers and persists despite government crackdowns.
Why it matters
High import taxes intended to regulate the economy are inadvertently fueling illicit trade networks and hurting legal businesses.
The grey market for gold is thriving despite continuing crackdown from the Directorate of Revenue Intelligence (DRI). In fact, India's bullion market is facing growing disruption from smuggled gold, and industry executives are saying that legitimate dealers and jewellers are being squeezed.Illegally sourced gold is being offered at discounts of as much as Rs 8,000 per 10 grams, according to an ET report. The widening price difference has emerged after the government raised the gold import duty to 15% from 6% in May, making the grey market more attractive.Over 100 tonnes gold may be smuggled inIndustry estimates suggest that more than 100 tonnes of gold could be brought into India through illegal channels this year.The increase in smuggling comes at a time when the Directorate of Revenue Intelligence has intensified its action against organised gold smuggling networks.According to the latest government data released on July 25, the agency seized more…
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