CHENNAI: High-end, rare luxury watches costing up to Rs 2 crore, which are a collector’s delight, are a big draw among the rich and famous in Chennai and other metros like New Delhi, Mumbai and Bengaluru. But fewer authorised dealers, limited choice of products, and 40% customs duty on such imported watches fuel smuggling from Hong Kong and Dubai, official sources said.
Information sourced through RTI applications shows that rare watches of brands like Patek Philippe, Breguet, Audemars Piguet, Rolex, Naviforce, Bvlgari, Astronomia Solar Zodiac from Jacob & Co, IWC Big Pilot, Franck Muller and Girard-Perregaux have been seized from passengers landing from abroad at airports like New Delhi and Mumbai in the last few years.
A Patek Philippe and a Breguet totally worth Rs 1.7 crore were seized by Chennai Customs from M F Mubeen, a suspected luxury watch dealer, on February 5 this year. The seizure later led to an Enforcement Directorate probe against Telangana revenue minister Ponguleti Srinivasa Reddy’s son Harsha Reddy, who was allegedly the buyer. Apple watches, though not as expensive, are also routinely seized by Customs, say sources.
Luxury watch smuggling has its own distinct modus operandi, according to multiple sources in the grey market. The availability of these rare watches is shared by agents on closed WhatsApp or Telegram groups like Dubai watch exchange group, Watch home UK, US watch co, etc. There are also Instagram pages which post pictures of these watches, some of which might also be ‘second-hand’, meaning previously owned, mostly by multi-millionaire businessmen.
When High-Net-Worth Individuals (HNI) wish to buy it, they place orders through agents who later facilitate its sale from specific shops in Hong Kong or Dubai which accept payment in cryptocurrency or hawala (cash), which is completely off the books. The agents also negotiate rates and commission for these payment methods.
‘Watch carriers are paid Rs 50,000 as commission’
“Orders can also be placed in certain watch shops in the city,” said C Rajan, a retired DRI and Customs officer.
Later the agents bring it back into the country through carriers, who are paid a commission as high as Rs 50,000 if they successfully smuggle it in their hand baggage, or wear it on their arms, Rajan said. This is higher than what carriers bringing in gold get, say sources.
Some foreigners have also been arrested during such smuggling attempts, RTI data shows. The watch box which contains documents like certificate of origin, warranty cards and manual are sent through a separate carrier in a different flight to escape Customs detection, industry sources said.
In case Customs authorities manage to foil the smuggling bid and catch them, carriers are instructed to declare them as ordinary steel watches or a fake/duplicate and get it cleared without payment of the hefty duty, the sources added. Such luxury watches are liable for confiscation under Section 110 of the Customs Act and Foreign Trade (Development and Regulation) Act, 1992, a retired official said.
Unlike gold carriers, those smuggling in such watches are not poor, but actually might be wealthy business agents looking to establish contact with the high and mighty in the world of corporate and politics, said an industry source.