Friday, January 17, 2014

Gold Smuggling on the Rise
[Editor: The time has come for the government to act and reduce the import duty by at least 2% and then gradually taper it down. However, too much government activism, is expected to keep the domestic GOLD  Jewellery market buoyant. Besides buying due to starting of the marriage season is also likely to keep the price of gold firm in the domestic markets]
Kolkata, Jan 16, 2014: Smugglers are certainly getting more and more innovative when it comes to sneaking gold into the country. A few days ago, the customs department seized gold biscuits hidden inside a consignment of mobile phones at the NSCBI airport in Kolkata. On Wednesday, the 40 Bn of the Border Security Force (BSF) seized 2.8 kg of the precious metal stashed inside the tyres of a bicycle. The haul was valued at more than Rs 82 lakh.

"There has been a spurt of gold smuggling from across the border in the last few months. In the last six months, the BSF's South Bengal Frontier seized nearly nine kgs of gold being smuggled into India from Bangladesh," an official said.

On Wednesday, officers at the Haridaspur Border Outpost, close to the International Check Post at Petrapole, received information of a gold consignment being delivered to the Kalitala village in Bongaon. Road barriers were set up and a cyclist was detained. On examination of the cycle, 24 gold biscuits were found inside the tyres. The 25-year-old cyclist was identified as Amit Halder, a resident of Kalyani in Puratan Bongaon. During interrogation, the youth confessed that the gold had been smuggled into India from Bangladesh.

There has been an increase in smuggling of gold into India in recent times. So much so, that the government has now asked jewelers to furnish details of purchases of gold bars or ornaments worth more than Rs 500,000. With gold running up the second highest import bill after crude oil, India has been making attempts to curb the entry of the yellow metal into India through legal channels. One of the steps adopted was increase of import duty by 10%. The import of gold was also tied to jewellery exports.

This led to a crisis and jewelers in the country became dependent on smuggled or recycled gold. The high customs duty also pushed up the price of gold in India turning smuggling into a lucrative business. The Wold Gold Council estimates that 150-200 tonnes of gold may have been smuggled into India in 2013. This is in addition to the official demand for 900 tonnes. The country's official import of gold has fallen significantly in the last year, pushing up demand for the smuggled stuff.

Courtesy: The Times of India