Why is GOLD SMUGGLED to INDIA?? Gold Smuggling | Kerala | scam

Описание: This video reveals everything about why Gold is smuggled to India..
Kerala is once again in the news; this time for something Notorious. For, Smuggling, Gold Smuggling!!
But why!! When gold is legally and easily available in India, why do smugglers take all the risk? This is exactly what we will discuss in this video.

Currently, Kerala is in News after exposing a 30KG Gold smuggling scam allegedly involving high officials. We are not getting into the specifics of this scam. Our question is, why is India continuously appearing in News as a Gold Smuggling Hub?

As per a report from Impact, which is an NGO in Canada, - India imports approximately 1000 tonnes of gold every year. Out of which, 800 tonnes of gold are via proper channel and 200 tonnes are smuggled gold.
Impact also refers some of this gold as Conflict gold, similar to conflict diamond or blood diamond, because of the human rights violations at the origin, especially mines in Africa and South America.  The report also says that, one third of global gold passes through India.

So back to our original question, What makes India so attractive for gold smugglers.
The reason is that, Gold Price in India is almost 15% higher than international market price.

Primary reason for this increased price is, Customs Duty. India has 12.5% customs duty on Gold.
On top of this, when it reaches customer, there is an additional 3 or even 5% GST, if it is gold ornaments.
These taxes have been on the rise for years. Even last year, Customs duty was increased from 10% to 12.5% and GST was increased from 1% to 3%.

This price difference from international market, combined with the demand for gold in India, is the greatest intensive for smugglers. India is the biggest consumer country of Gold. There is close to 24 thousand tonnes of gold possessed by Indian families. This is more than the combined gold reserves of Central banks of USA, Europe and China.

Gold smuggling used to be a plot in many Indian movies especially from the 1970s and 80s. The reason was that until 1991, importing gold to India was not easy, as there were government restrictions. There was great demand for quality gold, but the supply was low. This demand was the main motive of gold smugglers during those times. But since 1991, government has liberalized gold imports and customs duty was set to 1%. This move drastically reduced gold smuggling, as the incentives became almost nil. But over time, tax grew from 1% to almost 15%, which lured the smugglers to restart their business again.
Sources say, 1 KG of smuggled gold fetch them 600 Thousand, that is 6 Lakh Indian Rupees.
Apart from this, there is also scarcity of pure 24 Karat gold in India. This is one another reason of getting gold from Middle East and other Asian countries, where the quality of gold is higher.

Smugglers strike deal with the right people at customs and authorities to escape screening. Based on World Gold Council's estimates, only 2% of smuggled gold to India is seized by customs officials.

Another channel are the Porous borders - India shares borders with 7 countries and smugglers often re-route gold via these countries.

A recent trend, according to the Directorate of Revenue Intelligence (DRI), gold is smuggled from China, Taiwan, HK etc., via ecommerce platforms by hiding gold in white goods like electrical and electronic items including refrigerators, washing machines and even mobile phone shipments.

So, what are the solutions to address these gold smuggling issues.
As you would have already guessed; first, Indian gold price should be harmonized with International market price. For this, the customs duty has to be reduced.
The next step is to strengthen checks and clearances at our borders, to filter the items brought into our mainland.
The next action to be taken is at the level of local jewelers and retailers. Businesses tend to buy gold from black market to increase their profit margin. Authorities should strictly scrutinize and have regular checks to verify the source of gold with local Jewelers and retailers. If you have experienced, some jewelers tend to offer items without bill for a discount. As responsible citizens, we should abstain from such trivial discounts, as it negatively impacts our economy.

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