Metal Mules Busted, Indian Gold Smuggling Still Rampant

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I would like to report the culprits in India’s biggest gold smuggling case were carried off the plane with a hernia after trying to get their carry-on bag into the overhead locker, or that the wheels dropped off the carry-on as they left the arrivals hall but the reality is the single biggest seizure of smuggled gold in India was a simple tip off.

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But what a tip off, according to the India Business Standard the Special Operation Group of the Ahmedabad City Police seized 60 kilograms of the yellow metal worth an estimated $2.35 million at the Sardar Patel International Airport. Six individuals were arrested including three who had flown in from Dubai on an Emirates Airlines flight and three that met them on arrival and helped load the heavy cases into a car.

The previous highest quantity of pure gold bars and coins seized was in Mumbai last year when about 16 kg of the metal was seized at the airport. The biggest seizure on the country’s border was in 2013 when about 35 kg of gold was seized at Indo-Nepal border in 2013.

These quantities are just scraps off the table, though. According to Reuters, the World Gold Council estimates that 175 metric tons of gold were smuggled into the country last year, spurred by high customs duties intended to deter imports and help the balance of payments but in reality merely suppressing the trade to a black market.

According to Reuters the ever-inventive Indian smugglers have gone to the extent of getting human mules to swallow nuggets of gold. They have also hidden gold bars in dead cattle. The BBC estimates that on average 700 kgs of gold is smuggled into India every day and while smuggling has always been there it rose more than 300% between 2013 and 2014 after the imposition of higher import duties (10% as of this writing).

Ever more creative ways are found to hide the yellow metal. Sometimes gold is melted into seed-shaped chips and hidden in dates from Dubai, or ground into granules and mixed with other metals to look like ore. The metal is also being converted into gold belt buckles and flashlight batteries Reuters reports.

Realizing the move was self-defeating, the authorities in India are considering alternatives. According to the Business Standard the industry has suggested a reduction from the current 10% to a 2% rate with support from the Commerce Ministry. However, until a change is made inventive individuals will continue to find new ways of smuggling metal into the country and most of them will be more successful than the luckless six in Ahmedabad.

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