Nothing about them attracts suspicion, save the heavy jackets the women have been wearing in the warm flight. Also, Kochi in September is still sweltering and humid.
Minutes after collecting their luggage, the three are intercepted by customs officials with 20 kilos of smuggled gold in their possession.
October 2012: At the same airport, an airhostess and her software engineer friend, also a woman, are caught with a similar amount of gold clasped around their waists. A hike in gold import duties last year colliding with India's fascination for the yellow metal has ensured gold smuggling has metamorphosed from Bollywood potboilers into a living, thriving menace for India's customs officials.
Between financial years 2011 and 2014, the worth of gold seized by India's Directorate of Revenue Intelligence has risen more than fourteen times to Rs 250 crore, according to government statistics. But the seized amount--about 1 to 1.5 tons — is a mere pixel in what is a largely blurred picture. The World Gold Council estimates gold smuggled annually into India at a staggering 150-200 tons!
WHY THE SURGE?
Between March 2012 and August 2013, the Indian government raised duties on imported gold on five instances, bringing it up to 10% from 4%. This was done to clamp the country's yawning fiscal deficit fanned by India's rush for gold, according to the RBI's annual report for last fiscal year. The price of gold in India is now Rs 31,010/10 grams, about Rs 4,000 higher than the price in Dubai.
This means importing gold and selling it in India generates a profit of Rs 5 lakh per kilo, even after duties.
Moreover, about 20% of gold imported into India has to be ploughed back into exports. The move has, as expected, curbed gold imports, but not consumption. Imports in recent months have sagged to 20-30 tonnes a month from a record 162 tonnes in May last year.
India's gold import till November 2013 was 655 tonnes, compared to about 800 tons in the 12 months of the previous year. But according to the WGC, the country's demand for gold rose 18% to 975 tonne in 2013, compared to a 32% rise to 1,066 tonnes in China.
WGC estimated the difference between imports and actual consumption was brought in through unofficial, mostly illegal, means.
India still parks more than 70% of its household savings in gold and real estate, partly due to tradition and also as bank deposits haven't risen at the same rate as inflation. Not only in households, banks and unofficial financial institutions, gold in India is also stacked in temples and mosques.
The RBI, in its latest annual report, estimates India's total gold holdings as of December 2013 at 557.75 tonnes.
The last time gold smuggling became rampant was in the 1970s after finance minister Morarji Desai implemented the gold control act on August 24, 1968 barring citizens from owning gold bars and coins. The prohibition led to a rise of a huge black market for gold and fuelled the India's film industry's imagination for making thrillers with antagonists as gold smugglers.
The government abolished the gold control act on June 6 1990, as a precursor to its range of measures to liberalize the economy.
But then till now, the modus operandi of the smugglers has changed and so have their profiles and social strata. "While earlier they either wore gold or hid chunks in shoe heels or watches, now they bring gold plated small items such as spoons or belt buckles to large ones as compressors," says K.N Raghavan, commissioner at the customs department of the Kochi Airport.
He adds the articles are mostly factory made, so there is no way to detect tampering. Between April-December 2013, customs officials seized about 200 kilos of gold from three airports—Kochy, Trivandrum and Trichy--in the state, compared to just 10 kilos last year. The three airports together handle about 8,300 inbound international passengers everyday.
Milind Lanjewar, additional commissioner of customs at the Mumbai airport recalls a case of foolproof concealment. The department had a woman in its area of suspicion. She was a frequent flyer to the middle east and ran a "small business".
The woman had been frisked and her bags searched on several occasions before, but the officials found nothing. "It was then that our attention went to the baggage trolley. A thorough search revealed she was carrying gold plates made exactly in the same shape and size as the metal sheet at the back of the trolley—the compartment on the top which holds hand bags and other small luggage items.
Courtesy: The Economic Times