 "Intelligence agencies peg gold smuggling lower than WGC")
Going by seizures of smuggled gold, which have increased four times in 2013-14, intelligence agencies estimate the amount of gold smuggled into India last financial year at about 50 tonnes, against the World Gold Council’s estimate of 200 tonnes.
Within trade circles, it is being said despite the curbs on gold import, the commodity was available, as unofficial flow was continuing. Availability was a problem only for organised players, who weren’t able to buy unofficial gold.
In 2013-14, the amount of gold seized is estimated at about 1.45 tonnes, against 338 kg in 2012-13. According to data from the Union finance ministry’s revenue department, till February 24 this year, the amount of gold seized in 2013-14 was 1.32 tonnes.
In 2012-13, the number of seizures stood at 871, while in 2013-14, the number was 1,379.
Officials of an intelligence agency said they felt smugglers of the yellow metal had developed a business model to carry out their operations. They earned 10 per cent by evading import duty; also, on an average, physical delivery premia stood at eight per cent of the gold price during 2013-14. After the 18 per cent gain, they had to take into account expenditure of one-two per cent and hawala premium of three-four per cent. Of late, however, hawala premia are said to have fallen below three per cent.
An official said, “This means if one of every 15 consignments is caught by agencies, they will incur a loss that they will not refer.” He added assuming per carrier quantities had increased and chances of the gold being seized were less than one in 15, “we don’t think smuggling was more than 50 tonnes”.
In an interview with Business Standard earlier, C Rangarajan, former chairman of the Prime Minister’s Economic Advisory Council, had said remittances by Indians abroad hadn’t fallen. In the past two years, remittances have remained stagnant $63-64 billion. Many, however, say had it not been for smuggling, the remittances would have been higher.
An intelligence agency official said, “The sea route is under strict vigilance post 26/11; most carriers of unofficial gold have been through air, where seizures have been taking place.” Trade sources say roads, and containers coming through the sea route are used for bringing unofficial gold into the country.
An analyst tracking black money and gold closely said in the past few quarters, Indians’ black money in safe heavens abroad had entered India as smuggled gold; the money lying abroad was used to finance gold smuggling. The analyst believes this money was used to fund election expenses. A total of 20 per cent of the gold smuggled into India in 2013-14 is expected to have come through this route.
Within trade circles, it is being said despite the curbs on gold import, the commodity was available, as unofficial flow was continuing. Availability was a problem only for organised players, who weren’t able to buy unofficial gold.
In 2013-14, the amount of gold seized is estimated at about 1.45 tonnes, against 338 kg in 2012-13. According to data from the Union finance ministry’s revenue department, till February 24 this year, the amount of gold seized in 2013-14 was 1.32 tonnes.
In 2012-13, the number of seizures stood at 871, while in 2013-14, the number was 1,379.
Officials of an intelligence agency said they felt smugglers of the yellow metal had developed a business model to carry out their operations. They earned 10 per cent by evading import duty; also, on an average, physical delivery premia stood at eight per cent of the gold price during 2013-14. After the 18 per cent gain, they had to take into account expenditure of one-two per cent and hawala premium of three-four per cent. Of late, however, hawala premia are said to have fallen below three per cent.
An official said, “This means if one of every 15 consignments is caught by agencies, they will incur a loss that they will not refer.” He added assuming per carrier quantities had increased and chances of the gold being seized were less than one in 15, “we don’t think smuggling was more than 50 tonnes”.
In an interview with Business Standard earlier, C Rangarajan, former chairman of the Prime Minister’s Economic Advisory Council, had said remittances by Indians abroad hadn’t fallen. In the past two years, remittances have remained stagnant $63-64 billion. Many, however, say had it not been for smuggling, the remittances would have been higher.
An intelligence agency official said, “The sea route is under strict vigilance post 26/11; most carriers of unofficial gold have been through air, where seizures have been taking place.” Trade sources say roads, and containers coming through the sea route are used for bringing unofficial gold into the country.
An analyst tracking black money and gold closely said in the past few quarters, Indians’ black money in safe heavens abroad had entered India as smuggled gold; the money lying abroad was used to finance gold smuggling. The analyst believes this money was used to fund election expenses. A total of 20 per cent of the gold smuggled into India in 2013-14 is expected to have come through this route.