Smuggled gold doubles to 200 tonnes

The GFMS estimated 112 tonnes had been smuggled in 2012

Smuggled gold doubled in 2013 due to the import restrictions put in place to contain the current account gap.

According to estimates by the global precious metals consultancy GFMS, 150 to 200 tonnes were smuggled in 2013 from Dubai, Singapore and land routes of Bangladesh, Pakistan and Nepal. The agency estimated 112 tonnes had been smuggled in 2012.

After the restrictions through the increase in duty to 10 per cent and the introduction of the 80:20 (20 per cent of imports to be supplied to jewellery exporters and no supply if remittances of the previous two export bills are pending) formula last year, the grey market has become active. The World Gold Council (WGC) estimates smuggling at 150 tonnes.

Finance Minister P Chidambaram on Monday had said, “India cannot afford to have imports of 302 tonnes in April-May 2013. At this rate, imports could have risen to 1,800 tonnes.”



“The measures taken to curb imports are short-term. If not relaxed, the grey market will continue to grow this year as well,” said Somasundaram P R, managing director, World Gold Council (India). He said the minister had for the first time agreed three tonnes were smuggled every month. Gold is smuggled as jewellery, coins and bars to evade duty and premiums which work out to $100 an ounce. It is sold at a discount to the domestic price.