Source: LiveMint.com, Dec 13, 2019
MUMBAI : Surging gold prices in India are keeping customs officials on their toes.
Illegal inflows have jumped after the Indian government increased import taxes in July and prices surged to record highs in September. Customs officials have arrested people for attempting to smuggle in gold by concealing it in bags, clothes and their rectums. On one flight alone, officials caught 30 passengers trying to smuggle in 7.5 kilograms (16.5 pounds) of gold into Chennai.
“The propensity to smuggle now is very high because every time you increase the tax rate, you give that much more incentive to smugglers,” P.R. Somasundaram, managing director for the region at the World Gold Council, said in an interview. “So it will continue like this unless measures are taken by not just the government but also the trade which shares an equal responsibility to obliterate the grey market.”
Gold in India touched a record high of 39,885 rupees ($563) per 10 grams in early September on higher import taxes and as the U.S-China trade conflict and looser monetary policy boosted global benchmark spot prices. While bullion has since retreated from the all-time high, it’s still up 20% this year.