The highs and lows of gold smuggling


It was a puzzle that had left the officials of the Central Board of Excise & Customs flummoxed. On February 17, the officials got a tip-off that 6kg of gold was hidden in the IndiGo Airlines flight 6E-81 that was flying to Kozhikode from Dubai. But at the Kozhikode airport, the officers were left confused when none of the passengers carried the gold. The flight then travelled to Mumbai, Delhi, Ahmedabad, Kolkata, Chennai and back to Mumbai; but still the gold was not removed.

Finally, when the flight was slated to fly to Muscat from Mumbai on February 18, it was detained. Officials searched the plane for 13 hours before spotting the gold bars hidden behind the washbasins in the toilets. “This is the first time gold was recovered from a departing aircraft,” said APS Suri, Commissioner of Customs in Mumbai. The haul was worth ₹1.49 crore.

Customs officials have already conducted three similar operations this year. This high frequency is on the back of a record-breaking period when smuggling of gold hit the roof.

The World Gold Council estimated that 200 tonnes of gold was smuggled in 2014 to India, which closely competes with China for being the title of the largest consumer of the metal in the world.

High import duty

But experts believe that gold smuggling is beginning to wane since the Government in November abolished a rule that required importers to keep apart 20 per cent of their purchase for re-export. Now the 10 per cent import duty – which the Government had increased in a series of steps from 2 per cent in March 2012 – is the only other major control in the trade of the gold metal.

“In the 2014 Union Budget, the Government had not reduced the import duty. We hope that this will be looked into in the upcoming Budget,” said an official from the Customs on conditions of anonymity. With the fall in the current account deficit, largely thanks to lower oil bill, a cut in the import duty of gold is expected.

Already, the commission for carrying smuggled gold has fallen. An official from the Kerala’s Customs office said that the rate for carriers has come down to about ₹20,000 per kg of gold from about ₹30,000 a year ago.Carriers have used all kinds of methods to conceal gold; from hiding it inside laptops or under wigs to ‘installing’ it inside a mobile phone and mixing gold dust with coffee powder. The most effective method, for decades, has been to put it up the rectum.

“We often work on tip-offs. We also keep a tab on frequent flyers or those who make quick return journeys,” says the official from Kerala. Of late, there has been increasing involvement of airline crew and ground-handling staff. Further, as the Customs check is limited to international flights, often the gold is left behind in the aircraft and collected only once the flight operates on the domestic route.

From the aircraft, a ground staff then collects it, putting the gold bar or biscuit in a waste bag. The consignment often changes hands in toilets, which unlike other parts of the airport have no security cameras.