The Indian government has been attempting to restrict the domestic gold market, but there’s a big loophole in the rules that many travellers are taking advantage of while they can:
Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to NRIs to bring in the yellow metal legally after paying duty. Any NRI, who has stayed abroad for more than six months, is allowed to bring in 1kg gold.
It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.
“It’s not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. “We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.
Reports from Kerala said passengers from Dubai have brought more than 1,000kg of gold in the last three weeks. People who pay a duty of Rs 2.7 lakh per kg in Dubai still stand to gain at least Rs 75,000 per kg, owing to the price difference in the two countries. Gold dealers in Kerala say most of this gold goes to jewellery makers in Tamil Nadu and Andhra Pradesh.
75 000 INR is about $1214 US or $1290 Canadian, if I’m reading this right.
Must be disappointing to see your smugglers going legal.
Comment by Jeff — December 24, 2013 @ 09:50
One wonders how that loophole got into the rules in the first place, unless it’s been there for such a long time that it was generally only diplomats and high government officials who were able to take advantage of it. The idea of mass travel to foreign countries was mostly one-way emigration not too many years back. Now, workers go abroad for a few months or years, but then return to India.
Comment by Nicholas — December 24, 2013 @ 10:09