Smuggling in India will increase with the abolition of import duty on gold by Sri Lanka

Mumbai, Ta. 21 September 2020, Monday

Corona and the ensuing lockdown have hit gold smugglers in the country as well as various industries. Gold smuggling in the current year is estimated at an average of two tonnes per month, according to World Gold Council sources. The abolition of import duty on gold in Sri Lanka has increased the likelihood of gold smuggling.

Corona and the ensuing lockdown have led to the closure of international airlines and the halting of gold smuggling. Due to the currently strict standards for international flights, any smuggling of gold takes place through India's border routes.

Sources also estimated that the smuggling of gold in debt had reached 120 tonnes during the same period last year. Corona has led to a sharp rise in global gold prices following economic uncertainty. However, due to strict monitoring of transit routes in the country, smugglers are not able to take advantage of the high prices.

In addition to the high price, India is subject to an import duty of 12.50 per cent on gold and a 3 per cent GST on its sale. Also separate local taxes. This encourages gold smuggling.

The recent abolition of import duty on gold in Sri Lanka does not rule out the possibility of smuggling through varieties. In Sri Lanka, gold was subject to 18 per cent import duty.

India is the second largest consumer of gold in the world. Its annual demand for gold is around 300 tonnes. Gold prices have risen by 30 per cent since January this year. As the festive season approaches in the country, stockists are preparing to raise gold stocks. There is no denying the possibility of an increase in smuggling as demand for gold rises in the coming days.