New Delhi: Seizures of gold smuggled into India have surged, data showed on Wednesday, as the government tries to crack down on a thriving illegal trade made profitable by high import duty and other restrictions.
Trade Minister Nirmala Sitharaman told lawmakers on Wednesday the number of gold seizures in first 10 months of the 2014/15 fiscal year to the end of January had jumped to 3,412 from 2,450 for the whole of the previous year.
One reason for the jump was that customs and police have got wise to some of the tricks used to bring in gold, such as getting human mules to swallow nuggets or in hiding gold bars in dead cows.
The value of the gold seized in the 10 months was about $150 million, the trade minister said, up from $110 million in the 2013/14 fiscal year and just $7 million in 2011/12.
India was the world`s top buyer of gold in 2014, according to the World Gold Council. It estimates that 175 tonnes of gold were smuggled into the country last year, while consumption was 842.7 tonnes.
Gold seizures have surged since India ramped up import duty from 2 percent at the start of 2013 to 10 percent in August the same year, making illegal shipments more profitable despite the risks of getting caught.
India raised the import duty after facing a massive trade deficit due to gold imports that hit $54 billion two years ago.
Since then there has been a flood of smuggled gold and authorities last month made the single biggest seizure of 60 kg outside an airport.
The number of seizures was 503 in 2011/12 and 900 in 2012/13 before jumping to 2,450 in 2013/14, the year the import duty was raised to 10 percent.
Though India`s trade deficit has now come under control, it rose just 1.6 percent to $118.4 billion in April-January from a year earlier, the government has yet to change the gold import duty, despite repeated demands from jewellers.
Manish Jain, chairman-elect of the All India Gems and Jewellery Trade Federation, said the high import duty has created "a parallel economy through smuggling of gold".
