Illegally imported gold has been flooding into India, undeterred and usually undetected from intervening government efforts.
Even as official imports of gold into India have decreased dramatically, the actual flow of gold bullion, gold coins and gold jewelry into the country has continued. New smuggling networks have sprung up to such as degree that whistleblowers who help bust illegal gold shipments are likely to earn a bigger reward than those who help bust cocaine and heroin smugglers.
On a recent day, gold bars worth more than $800,000 were seized at the Hyderabad International Airport. Three passengers were trying to sneak it into the country tucked away in their pants and shoes, reported Mineweb.
Earlier this year, the India government raised tariffs and limitations on gold imported into the country. Given the national consumer appetite for gold, the outflow of Indian currency to acquire it was wrecking havoc on the country’s economy. When they buy gold, local buyers typically save the commodity that they've purchased rather than converting it to other products or services.
Since last year, gold seizures have almost doubled. Most smuggling attempts are made through the country's neighbors such as Bangladesh, Nepal and Pakistan, given their weak border security.
Customs officials report that Pakistan has seen a 400 percent increase in gold imports, a volume which is intended to travel on into India.
“In the two months of September and October, customs officials have seized around a ton of gold from air travellers,” wrote Mineweb’s Shivom Seth.
Given gold’s price drops in 2013, many believe that both India and Chinese consumers are intent on devouring the existing gold supplies now, confident that the price of gold will rise again.