Seizures of smuggled gold have shot up to a four-year high in 2022-23, indicating an alarming rise in unauthorised trade of the yellow metal following the import duty hikes implemented last July.
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In just the first 11 months of 2022-23, smuggled gold of almost 4,000 kilograms has been seized, which is already over 10% higher than seizures through the full pre-COVID year of 2019-20. This is almost equal to the total seizures made over the past two years combined, as per data from the Finance Ministry placed in the Lok Sabha on Monday.
“Government agencies have detected cases of attempted smuggling of gold and silver,” Finance Minister Nirmala Sitharaman said in response to a query from MP Sougata Ray. “The smugglers of gold and silver adopt various methods…including body concealment,” she added.
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In July 2022, the government raised the basic customs duty on gold from 7.5% to 12.5%, and added a 10% social welfare surcharge on the duty, in a bid to curb imports and the trade deficit.
Officials believe that the higher inflows of gold through the smuggling route would also have brought down the official gold import bill. Between April 2022 and February 2023, India’s gold imports have dropped almost 30% from a year ago to $31.7 billion.
While airports account for over 2,500 kg of smuggled gold seized by agencies, the influx from other sources seized in different parts of the country have shot up 52.3% so far this year from 2019-20 levels.