4,869 kg of smuggled gold seized in FY24, Myanmar border major smuggling route

To combat the growing menace of gold smuggling, DRI has intensified its surveillance and enforcement efforts.

India seized 4,869.6 kg of smuggled gold in FY24, as smugglers continue to exploit porous borders, particularly in the Northeast, and high domestic demand, the Directorate of Revenue Intelligence (DRI) has said in a report.

The Myanmar border remains one of the most active routes for illicit gold, with the country serving as both a source and transit hub.

“DRI needs to continue the work as we have decreased customs duty on gold but gold smuggling continues to be a menace,” revenue secretary Sanjay Malhotra said on December 4.

The government lowered customs duty on gold from 15 percent to 6 percent in the Budget 2024 but that hasn’t deterred smugglers.

There is a persistent mismatch between India’s gold demand and domestic supply, as the country relies on imports to meet over 90 percent of its annual consumption, driven by cultural and investment needs.

Smuggling syndicates use well-established corridors such as Tamu-Moreh in Manipur and Zokhawthar in Mizoram, taking advantage of the challenging terrain and minimal border controls.  Tamu and Rih are border towns in Myanmar that also serve as legal trading routes.

Gold from Myanmar often passes through transit hubs like Muse, Ruili and Mandalay before entering India, DRI’s 2023-24 Smuggling in India report said.

“Manipur and Mizoram have become critical hotspots for gold trafficking, as evidenced by frequent seizures. The DRI has significantly intensified its surveillance along these routes,” it said.

According to the Central Board of Indirect Taxes and Customs, which runs DRI, 6,425 cases of smuggling were registered in FY24.

Another prominent smuggling corridor runs through Nepal, where smugglers use train and road networks to move gold into major Indian cities. In West Bengal, the Siliguri Corridor continues to be a choke point for gold entering mainland India, the report said.

Smugglers are getting  smarter

Smugglers have increasingly adopted ingenious ways to avoid detection.

Gold is frequently concealed in machinery parts, alloyed with other metals, or hidden in modified vehicles with specially crafted cavities.

Smuggling through air cargo and courier routes has also emerged as a significant concern.

The “hub and spoke” model is the modus operandi for many smuggling syndicates. Smuggled gold reaches central hubs and is then distributed to different regions.

Once in India, gold is often re-melted and crafted into jewellery, making it difficult to trace its origin and integrate it into the legal market.

The syndicates are evolving constantly. The enforcement efforts have become more targeted and data-driven, the report said.

Price disparities between India and neighbouring countries continue to incentivise illicit trade.

“We are here not only for revenue but for the whole economy of the country. If, in the process of garnering some revenue, we hurt the industry or economy, that’s certainly not our intent. Revenue comes in only when there is income, so we have to tread cautiously and avoid, as they say, killing the golden goose,” Malhotra said.

Enforcement agencies such as the DRI have been granted powers to search, seize, and arrest individuals involved in smuggling.