As gold prices soar in the Indian market, incidents of gold smuggling have also risen sharply. In FY 2024, 241.1 kg of smuggled gold was seized at the Sardar Vallabhbhai Patel International Airport (SVPIA) by the Directorate of Revenue Intelligence (DRI) and the Ahmedabad Customs department.
This marks a 65% increase compared to the 146.4 kg seized in FY 2023.
Smugglers constantly change routes and concealment methods to evade detection. Customs officials say that specific routes used for gold smuggling are closely monitored. Officials need to be alert to new ways of concealing gold.
Rise in customs duty
Gold smuggling has also increased since basic customs duty on gold was increased, say sources. Smugglers benefit from evading taxes and duties up to 18%, including 12.5% customs duty, 2.5% agriculture cess, 3% GST and 0.1% importer premium. This evasion results in a profit of more than Rs 13.86 lakh per kg.
After deducting expenses such as carrier costs, air tickets and accommodation costs, the effective profit per kg of smuggled gold is Rs 12.86 lakh.
Of course, increase in gold prices is the major incentive to smuggle the yellow metal. Gold prices are on the rise due to geopolitical uncertainty, an election year in India and the US, high inflation, and escalating conflicts.
Gold prices have increased by about 79% from FY 2020 to FY 2024. On Monday, gold was priced at Rs 77,000 per 10 gms in the domestic market.
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