NEW DELHI: In a significant shift from the trend noticed in 2019-20, the largest amount of gold seized by the Directorate of Revenue Intelligence (DRI) in 2020-21 & 2021-22, was of Myanmar origin. In 2019-20, the largest originating country/region of smuggled gold was the Middle East, as per the “Smuggling in India Report 2021-22” which was unveiled the Finance Minister Nirmala Sitharaman on Monday.
According to the report, the DRI has made seizures of 833 kg of smuggled gold during FY 2021-22. About 37% of the total gold seized had its origin from Myanmar, 20% from Middle East and 7% from Bangladesh. Gold (24K) price currently hovers around Rs 47 lakh/kg.
“During the pandemic, due to the widespread disruption to air traffic, there was a rise in the instances of gold smuggling by land routes (road or rail). Much of this smuggled gold originated in Myanmar and was smuggled into India through the old Tamu-Moreh-Imphal trajectory in Manipur, which goes through a vast expanse of unguarded but difficult terrain, and the Zokhatwar route in Mizoram. However, due to the constant and alert vigil maintained by DRI officers, there was a string of spectacular gold seizures in the last three-quarters of FY 2020-21,” the report said.
Many international reports suggest that smuggled gold is brought into Myanmar through China at Muse, one of the bordering cities on the Myanmar- China border.
The surge in smuggling using the courier route is an emerging trend, the report added. The concealment of gold in machine parts has also seen a rise and is hard to detect, even with sophisticated x-ray equipment.
The quantum of import of gold into India is significantly high to meet the huge demand. India, the world’s second-biggest gold consumer after China, imports about 900 MT of gold a year. Gold consumption in India was 797.3 MT in 2021, the highest in the past five years, according to the World Gold Council data.
“Gold smuggling in India is fueled by this huge demand for gold combined with import duty on licit import of gold. Besides being one of the major vehicles of money laundering in the country, smuggling of gold also leads to growth of mafia groups in the country and is a heavy drain on the foreign exchange resources of the country,” the report said.
Beside gold, narcotics, foreign currency, cigarettes and endangered wildlife species are other top smuggled commodities. According to the report, the total quantity of narcotic drugs and psychotropic substances seized in 2021-22 was 28,334 kg.
A total of 13 foreign currency cases were booked by the DRI in FY21-22 whose value stood at ₹11.37 crore. US dollar accounted 75% of the seizures.
Cigarette smuggling is another area of concern, the report highlighted. “High incidence of tax on cigarettes in India results in a tax arbitrage in favor of smuggled cigarettes on which no taxes are paid and there is no statutory requirement of pictorial warning covering at least 85% of the packaging space. More importantly, the smuggled cigarettes are, on average, 50% cheaper in the Indian market, compared to the price of any similar cigarette brand,” the report said. The total value of seized cigarettes by the DRI stood at about ₹93 crore in FY22.