According to a recent report by the Central Board of Indirect Taxes and Customs (CBIC), seizures of smuggled gold in India, have increased by nearly 43 per cent in the first six months of the current financial year (2023-24). During the same period last year. It is reported that the amount of gold smuggled into the country may increase significantly.
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Gold smuggling is increasing day by day
CBIC chairman Sanjay Kumar Aggarwal attributed the increase in seizures to several factors, including prevailing gold prices in the international and domestic markets. He also said that the customs department is working well in detecting gold smuggling.
However, it is important to note that the increase in seizures does not necessarily mean that gold smuggling has increased. It is possible that the customs department will be more effective in catching smugglers.
However, the 43 percent increase in gold seized is a significant cause for concern. Gold smuggling is a major economic crime, costing the Indian government billions of dollars in lost revenue every year. This will also distort the gold market and lead to inflation.
In the last financial year 2022-23, 3,800 kg of smuggled gold was seized. Also, 1,400 kg of gold was seized between April and September last year. This year it has increased to 2,000 kg during April and September.
To prevent gold smuggling, the Indian government is taking several measures including increasing the import duty on gold and investing in new monitoring technologies. However, it is clear that more needs to be done to address this issue.
Here are some reasons for increasing gold smuggling in India
Price differential: Gold is generally cheaper in international markets than in India. This price difference makes it profitable for smugglers to smuggle gold into the country.
Demand: India is one of the largest consumers of gold in the world. This high demand creates a large market for smuggled gold.
Porous borders: India shares long borders with several countries including Myanmar, Nepal and Bangladesh. These borders are relatively porous and easy to cross illegally, making them ideal routes for gold smuggling.
Corruption: Corruption of customs officials can also facilitate smuggling of gold.
The Government of India should take further measures to curb gold smuggling, such as increasing border surveillance, strengthening customs enforcement, and reducing price differentials between the domestic and international gold markets.