The proposed hike in customs duty in the recently presented Union budget could come as a boon for gold smugglers.

The Centre has proposed to increase duty from two to four per cent for gold coins, bars, platinum and levy one per cent excise duty on the unbranded jewellery. With this duty structure, buyers have to pay Rs. 5,000 to Rs.6,000 more for purchasing 100 grams gold biscuit and this hike could force many to look at options of smuggling gold from foreign countries due to price variation in India and UAE market, felt R.S. Brothers Showroom Director Kalpesh.

According to jewellers, Gujarat coast along with port cities such as Visakhapatnam and Kakinada, Chennai and Mumbai could be safe places to smuggle yellow metal from foreign countries. They explained smugglers transport contraband in merchant ships and hand it over to their associates before coming to the harbour. “Smugglers usually prefer sea route as there will be less surveillance at the ports when compared to airports. Soon after getting gold, the metal would be delivered to merchants concerned,” they said.

Another modus operandi is bringing contraband in flights from Dubai, Singapore and other foreign countries. Some would carry imitation jewellery with them while going to a foreign country where they would purchase the same design ornaments made with original gold and return to India after a few days. Customs officials busted several international gold smuggling rackets .Two years ago, the Air Intelligence Unit of Customs department cracked a racket at Trichy airport and seized 5 kg of gold biscuits smuggled from Sri Lanka. Three garment traders were also nabbed at Pune international airport last year for allegedly smuggling gold.

When contacted, Customs officials in Hyderabad said, “Chances of gold smuggling are now bright with the Centre's move. Cases were not reported earlier as customs duty was less,” they added.