FY17 gold seizures fall 60% on note ban

Demonetisation crippled gold smuggling with an unprecedented 60 per cent fall in seizures in 2016-17 over 2015-16.

According to the Directorate of Revenue Intelligence (DRI), it seized 560 kg gold valued at Rs 162 crore in 2016-17 (till March 26) against 1,417 kg worth Rs 410 crore in 2015-16.

In the last quarter of 2016-17 the agency recovered only 171 kg of gold in the 33 operations conducted post demonetisation. Overall, the agency conducted 105 search operations and arrested 188 people in connection with smuggling gold in 2016-17.

“Seizures in the last quarter indicate attempts by organised criminal networks to resume large-scale gold smuggling,” said a DRI official. According to him, smugglers are now attempting to regroup and are seeking new routes for their contraband.

Gold smuggled in from Sri Lanka and Myanmar has replaced that from traditional sources like Dubai and Thailand. “Seizures showed a large quantity of gold is being smuggled in from Myanmar through the north-eastern states. These consignments are brought to Kolkata, from where they are distributed to various parts of the country,” the official added.

Insurgency in Sri Lanka and Myanmar supports the illegal trade in gold, according to the official. 

Despite the decline in the number of gold smuggling cases over the past year, the illegal trade remains highly lucrative. Another official said smugglers made a profit of Rs 1-1.5 lakh on an average on each kilo of smuggled gold. This excludes hawala charges and carrier expenses. 

Seizures are just the tip of the iceberg. Investigative agencies have no estimates of the actual amount of illegal trade in gold.