KOCHI: With gold prices soaring to dizzying heights, even smugglers seem to be doing the math, and walking away! As the yellow metal turns too expensive for both the common man and the underworld, smuggling syndicates are quietly swapping gold for ‘more lucrative’ goods.
A sharp cut in import duty, coupled with soaring market prices, has flipped the risk-reward equation, pushing organised rackets to pivot towards drugs, foreign cigarettes, and high-value electronic gadgets, according to senior customs and intelligence officials.
For years, rising gold prices made smuggling lucrative. That logic no longer holds. With the 2025 Union Budget slashing gold import duty from 15% to 6%, profits have thinned dramatically while the stakes have risen steeply.
“Today, 1 kg of 24-carat gold costs around Rs 1.4 crore. Earlier, a smuggler could pocket up to Rs 20 lakh per kg. Now, if that consignment is intercepted, the loss can cross Rs 1.6 crore. The profit at the current rate is around Rs 5 lakh for 1 kg of gold. So it’s simply not worth the gamble,” a source said.
The shift is already visible in seizure trends. During peak travel seasons — April-May and January-December — customs and allied agencies earlier seized nearly 50 kg of gold a month at Kochi airport. This year, the agencies expect that figure to plunge to around 5 kg.
But the lull in gold smuggling has brought a new and more dangerous challenge. Intelligence agencies say syndicates are exploiting the holiday rush to traffic synthetic drugs such as MDMA and hybrid weed, along with foreign cigarettes and premium gadgets like iPhones.
“There is a clear pivot since 2025. Drugs and electronics offer higher margins and lower perceived risk,” a senior customs official said.
“We have foiled several attempts, and surveillance has been tightened at Kochi and other international airports.”
Investigators say narcotics are being sourced from Thailand, Malaysia and other Asian countries, often routed through hubs like Qatar and Dubai before landing in Kerala. Adding to the concern is the emergence of counterfeit cigarette consignments.
“Some gangs based in Cambodia are even manufacturing fake Indian cigarette brands. These duplicates are finding their way into Kerala markets,” a senior DRI officer monitoring southern states said.
While enforcement agencies are stepping up checks, officials warned that smugglers increasingly rely on unsuspecting passengers to move contraband. “Many innocent travellers are trapped by requests to carry parcels for ‘relatives’ or ‘friends’ without knowing what’s inside. With the holiday rush setting in, passengers must stay alert,” a customs official said.