Monday, 11 February 2013

Gold smuggling in India rising

"Despite India's best efforts to curb illegal gold imports, gold smuggling has been rampant.

According to the All India Gems and Jewellery Trade Federation, India imported 950 tonnes in 2012. Of this, 250 tonnes has come into the country through the illegal channel.
``In 2011, India imported over 900 tonnes of gold and none of it came through smuggling. The hike in customs duty has not stopped the import of gold into the country. It has only changed the route as smugglers earn a profit of around $3,719 (Rs 200,000) on every kilogram of gold smuggled into the country,'' said Federation Chairman Bachhraj Bamalwa.
"India, the world’s largest consumer of gold, has been facing a huge problem of widening current account deficit (CAD) because of outflow of the foreign exchange on gold imports.

The CAD widened to $38.7 billion or 4.6 per cent of the GDP in the first half of the current financial year, pushing the government to hike the customs duty from 4 per cent to 6 per cent. In the Budget for 2012-13, it was raised from 2 per cent to 4 per cent." The latest duty hike, in January 2013, took the rate of tax on Gold Bullion imports to 6%, with the duty on unrefined gold rising to 5%.