NEW DELHI: As the yellow metal continues its rise in the Indian bullion market, recently revisiting five-month high of Rs 54,006 per 10 gram, buoyed by global push, smuggling of the gold metal continues to touch new peaks. The surge in smuggling has been triggered by an extremely high demand in the wedding and festive season, coupled with low imports during the month of November, due to rising prices in the international market, said Manoj Jain, a Hyderabad-based bullion trader.
In one of the recent seizures during the month of November, the custom officials at the Chhatrapati Shivaji International Airport of Mumbai seized 61 kg of gold worth Rs 32 crore in one day, making it the highest value single-day seizure made by the department ever.
Amidst falling imports and high demand some of the jewellers are also offering discounted rates which has been possible by supplies coming in from smuggling, says jeweller from Maneck Chowk, Ahmedabad. “Gold is available in the domestic market even at the peak season and rising prices at a discount of Rs 1,200 per 10g due to rising unofficial procurement at lower costs,” he added.
On an average, a smuggler in the recent time can earn a profit of up to Rs 3.15 lakhs if he manages to get past the custom sleuths posted at the Indian ports, says Anurag Tripathi, an ex-MCX analyst and now a bullion trader.
“The average difference in cost of gold between Dubai and India — at current price level — is about Rs 7000 per 10 grams, due to the quantum of duty levied on the yellow metal here,” Tripathi said. So, a 500-gram gold biscuit from UAE would fetch a smuggler margin of about Rs 3.25 to 3.5 lakhs, he added.
India recently, around July this year, had raised the basic import duty on gold to 12.5% from 7.5%, to dampen its demand and bring down the trade deficit. The quantum of import of gold into India is significantly high because of huge demand. India, the world’s second-biggest gold consumer after China, imports about 900 MT of gold.