Seizure of smuggled gold up 43% in first half of FY24, says CBIC chairman

India is the largest importer of gold in the world, both on account of its status as a negligible producer as well as the huge demand for the precious metal from households for a variety of reasons.

India's customs department seized 2,000 kg of smuggled in the first half of 2023-24, 43 percent more than what it had in the same period last year, Sanjay Kumar Agarwal, Chairman of Central Board of Indirect Taxes and Customs (CBIC) has said.

Speaking to reporters on October 25 in the Capital on the sidelines of a special campaign to destroy seized narcotics and foreign cigarettes, Agarwal also cautioned that higher seizures did not necessarily mean that the smuggling of gold had increased.

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"The difference in prices of gold which are prevailing in the international market and the domestic prices could be a reason for the increase in gold smuggling. But again, higher seizures this year can also be because the customs department is doing a better job of detecting gold smuggling. So it is difficult to say if the smuggling of gold has gone up or gone down," the CBIC chairman said.

In 2022-23 as a whole, Indian authorities seized 3,800 kilogrammes of smuggled gold.

India is the biggest importer of gold in the world, with latest data from the commerce ministry showing that gold worth $22.25 billion has been imported in April-September 2023, 10 percent more from a year ago.

"Seizures are happening regularly and in huge quantities. Gold is smuggled through land borders, like from Nepal or Myanmar or Bangladesh," Agarwal added.

The resumption of international flights has also added to the smuggling of gold, with the CBIC's Bangalore Customs Zone saying on social media platform X, formerly Twitter, that its officers on October 24 had found more than a kilogram of gold paste worth Rs 80 lakh hidden in the washroom of an aircraft from Abu Dhabi.

Also Read: High import duty, resumption of flights lead to rise in gold smuggling

Speaking to reporters on October 25, Agarwal also rejected suggestions that smuggling of gold could be on the rise due to the level of import duty on the previous metal.

"If you add the duty element, then prices in the domestic market should be higher. But it is not so because a lot of demand is also met from domestic gold also… So gold smuggling cannot be one-to-one linked with the duty which is levied on gold imports," the CBIC Chairman said.