Part of steps to check rampant smuggling of gold into India

The Customs and Central Excise Department will soon install electronic detectors sensitive to non-magnetic metals at three airports in Kerala to check the rampant smuggling of gold from the Gulf into India.

Additional Excise Commissioner G. Ravindranath told The Hindu that the current sensors at the airports were more attuned to detect base ferrous metals and were not very sensitive to gold, platinum, or silver.

The X-ray machines at the airports could easily detect gold concealed inside the baggage of passengers. The latest metal detectors will help enforcers intercept carriers who conceal gold in their body cavities or on their person. The detectors will also be installed at the green-channel exits of the airports.

Import duty hike

The Central government has increased the import duty on gold to curb imports that contributed to the country’s current account deficit, which has touched a record high. However, the duty rise has not dampened the huge domestic demand for gold. The price for gold is at least 6 per cent higher in India than in the Gulf, making its smuggling highly lucrative.

Customs enforcers said organised smuggling networks, similar to the ones that existed in India prior to economic liberalisation in the early 1990s, had recruited carriers, mostly low-paid migrant workers employed in the Gulf, to smuggle gold into India. The carriers

contraband gold in their body cavities or taped the metal to the inside of their thighs, on their ankles and backs, or hid it inside abdominal belts and knee caps. The smugglers often instructed their carriers to remit duty if they felt that they would be caught. Successful carriers were paid a higher margin.

Last year, the Directorate of Revenue Intelligence had recovered 1.4 kg of gold in biscuit form the rectum of a passenger intercepted at the Cochin airport. Similar gold seizures were reported in Mangalore (concealed in an oats tin), Hyderabad, and Chennai this year.

Hawala link

However, the seizures were just a fraction of the gold (an estimated 250 tonnes) smuggled into the country. Investigators said Gulf-based hawala networks (an illegal and largely anonymous cash transfer practice preferred by those who wished to avoid normal banking channels for different reasons) now preferred to compensate their agents in India by using smuggled gold.

The market price for 1.5 kg of gold in India was an estimated Rs.50 lakh. Hawala networks preferred “moving gold” instead of other articles into India because it assured them “instant liquidity” at considerable profit. Gold smuggling also aided their money-laundering operations. A Customs enforcer pointed out that at least 315 flights landed at the international airport here a week. The airport handles a minimum of 40,915 passengers a week. Thorough frisking of all passengers, particularly women, was impossible. The new sensors would help the department enhance their duty collection, which had touched an all-time high of Rs.3.5 crore this year alone.