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Innovative Gold Smugglers (Who Got Caught)

After the gold import restrictions and heavy import duty by India on gold, we’ve seen a massive increase in gold smuggling. Here are some innovative ways smugglers have found to get gold in without paying duty – but note that these are only those that got caught.

Gold bar kept under passenger seat on India bound flight that has an onward journey (like Dubai-Mangalore-Mumbai). Accomplice occupies the same seat on the onward journey and then isn’t checked because domestic arrivals aren’t checked by customs. This was done 30 times! (Tulunadu news)

Stuffed into underwear by a woman, as couples are not inspected in detail. (Tulunadu news)

In Packets of Mehndi, which is decorative powder. Gold powder was mixed in. (Hindu Business Line)

Gold bar in a pocket of a sandal worn by the passenger. (NewsKarnataka)
                       Innovative Gold Smugglers (Who Got Caught)

As Date seeds in a large consignment of dates – the gold was put inside the dates! Also, in chairs, with springs made of gold. (Times of India)

As a belt buckle. And as gold rods inside a hair styling crimper set. (Daijiworld)

Innovative Gold Smugglers (Who Got Caught)

As gold staple pins. (Dailymail)

Gold wires in trolley bag linings (Times of India)

In enamelled eight bangles weighing nearly 2.5 kg! (Times of India)

As part of a rechargeable battery in an emergency light. They replaced four of the eight plates with gold, so the light would actually function! (Hindustan Times)


For all those that were caught, there must have been thousands that got away. It’s impossible to stop this menace and soon, there will be the sea routes, and guns and mafia. It is better to remove this duty altogether, before we create a monster we can’t stop.

Oh, and it doesn’t really help when the incentives are this good:

The smugglers are paid air tickets plus Rs 20,000 as commission for each trip. As the carrier can not be arrested unless the seized gold’s value is above Rs 25 lakh, the gangs are bringing in a calculated quantity through each member and even if it is seized in some cases, they are paying the penalty and getting it released," a customs official said.

For each kilo of gold smuggled from Dubai, the operator gets about Rs 3 to 4 lakh profit.

No wonder they’ll smuggle it in any which way they can. But do you know more? Please post a link too! We’ll keep this blog post alive.

  • DJ says:

    Chidambaram is single handedly responsible for creating a smuggling network which will be used for all sorts of nefarious activities. Someone should take him to court for this. He should be behind bars for causing the presumed spike up in crime growth. I think he confused crime growth with GDP growth rate. How someone from Harvard cannot understand such a commonsense issue, it is the biggest mystery of life in India. If it was Pranab, we could have said, oh he’s just stupid and doesn’t have a clue. But, Chidambaram is supposed to be one of the smarter ones. Someone should insist that he stop walking alone (to wherever the hell he wanted to walk to, because it surely wasn’t a good place).

  • SMART Trader says:

    Smugglers are trying every possible way.
    Here is an innovative way that turned out to be a tragedy

  • Jose says:

    Come on..this is a unofficial VDS Scheme by the government and converting money stashed abroad. Also the new 2005 Currency notes is getting into Gold. All part of a move to get in money ahead of elections.Gold sales are still up 13 % globally. So India gets its full share & growth. The Government knows it well enough and is hand in glove.

  • JustSaying says:

    Not directly linked to this, but unofficial rates for fund transfers between Dubai and India have increased substantially. Recently, I was offered a rate of INR17.5/ AED when the actual exchange rate was around INR16.80/ AED. So definitely there is an unofficial demand for AED.

  • Rodin says:

    How to estimate the value of gold smuggled- read this :
    By the way DJ , PC never told anyone to smuggle gold- people cant blame PC for their greed- No intent, law, plan of govt will work w/o the co-op of citizens and the govt machinery.

    • DJ says:

      You cannot be serious? He very much did so! The entire point of any policy is to provide incentives/disincentives. PC’s policy provides an incentive to creating smuggling supply chains, because bringing in gold through legal channels incurs his moronic import duties. Through his policy, he is indeed telling people to smuggle gold more than usual. That’s an objective fact!
      There will always be greedy people but some policies will give them more incentives to do illegal things than other policies. Someone as educated as PC in finance and economics should be able to understand this basic principle of any economic system. Greed cannot be banished, but it can be dis-incentivized or better yet, channeled into productive areas. Citizens would have no need to smuggle gold if there were no import duties. What is irritating is that citizens like yourself don’t even appreciate your own economic freedom! I guess this is exactly why we deserve FM’s like PC who will make it their job to infantilize the economy (and even that they cannot do properly).
      You pointed out that article. Did you not note the last line in there, which says that the import curbs might be a costly mistake. Who else but PC came up with the idea of import curbs when every economist opposed it (except that doofus bureaucrat who I won’t name)?
      Lastly, if policies are irrelevant as you said, why has there been a hike in smuggling since the import duty hikes? The amount of smuggling should have been the same if PC’s import duties have nothing to do with this?

  • Rodin says:

    The success or failure of the import curbs will be known if we can know the amount of gold imported + smuggled into the country before and after the import curbs and not by looking at the increase in smuggling alone. May be the problem is in the enforcement and leniency shown in punishing the smugglers rather than the curbs which was resorted to fix the falling Re. May be we should look at the movement of the Re after the curbs and not at the amount of smuggled gold to determine the success of the curb.
    DJ what you are saying is when economic freedom is curbed people will take the legal freedom to defeat the curbs and therefore curbs are self defeating and there should be none- The danger is that your argument can be extended to all curbs in economic as well as non-economic areas and that will lead to anarchy.

    • DJ says:

      1) You seem to doubt the linkage between import curbs and the spike up in smuggling. And your excuse is that you do not know the effect, so no one knows? Well, not everybody is uninformed. Why don’t you check with official sources? How about checking RBI governor’s comments? Or, even more relevant to this comment thread, why not check with PC himself:
      “Finance minister P Chidambaram on Monday acknowledged a spurt in gold smuggling in the wake of higher duties and other curbs on the import of the yellow metal into the country. While estimating illegal shipments of up to 3,000kg in certain months — a record by all accounts — the minister justified the restrictions, citing high current account deficit (CAD) but indicated that some of the tightening may be eased in the next few months.”
      2) And, as economists have said a million times, which you seem to have missed (even though you cited an article yourself pointing out the same), that import curbs are not the right way to handle a high CAD. High CAD is not an excuse to do stupid things. Period. I can’t present any and all arguments in this comment. Please refer to any of the celebrated economists in the country.
      3) Additionally, there has been plenty said about making the rupee free and not artificially held against any level, so I’m not going to get into that either. In fact, the temporary fix of the rupee level is yet another problem as a result of these misguided curbs, if they have had any effect, which is far more suspect than their effect on smuggling. In fact, the RBI governor and other economists have said that dubious controls like these were responsible for macro-economic instability last year.
      4) The arguments in your second paragraph are a strawman. They are also wrong as smuggling is not exactly a legal freedom, unless one argues that curbs themselves ought to be illegal, but that would be a philosophical point. “No curbs” and “economic freedom” does not mean no regulation, or no rule of law or no policy or no oversight or anarchy or cronyism or oligarchy. Its actually the opposite, as no curbs means that the act is visible and thus, easy to measure, monitor, redirect, etc.
      5) The issue isn’t merely that curbs will be circumvented legally or illegally. If you read Jayanth Varma’s last paragraph, the circumventions will then be used for other more serious criminal activities. Gold smuggling in the 70s and 80s gave rise to many Haji Mastaans. That already seems far more anarchic to me. We seem to have not learnt anything from previous experience.
      6) And, sure, the solution can be better, legal prevention of smuggling. Although, our legal system can’t even solve simple issues so you have very high hopes. But, even in a good system, it is not only very hard to do, it is also very, very expensive. Is it really in the best interest of the country to spend the money, time, resources in chasing smugglers or is it better to prevent the establishment of these smuggling rings in the first place? Isn’t prevention supposed to be better that the cure?
      7) And, then the real policy issue that needs to be fixed is why people have nothing better to invest in, in our huge country, except into a barbarous relic.

  • Rodin says:

    The govt has increased the base rate on Gold & Silver for calculating the imp. duty.
    Will the Govt do this if the curb is ineffective in reducing deficit and stabilizing Exchange rate worrying only about the unwanted side effect of increase in illegal smuggling?