By Paul Ploumis 19 Aug 2015 Last updated at 08:37:42 GMT
MUMBAI (Scrap Monster): The gold smuggling in India is estimated to drop significantly during 2015, when compared with the previous year. According to industry estimates, the volume of smuggled gold during the entire year 2015 is likely to total 150 tonnes, 40% lesser when compared with the 200 tonnes smuggled during 2014.
According to Indian Bullion Jewellers Association (IBJA), there are several reasons to assume that gold smuggling will see a slowdown during the current year. Firstly, the demand for gold has dropped sharply during recent times. In fact, there is hardly any demand for gold in the country. Despite the sharp fall in international gold prices, gold intake in the country has not witnessed much momentum, especially due to the absence of wedding season. The gold demand in the country had dropped nearly 25% during the quarter ending June this year. Secondly, the implementation of strict security measures and deployment of state-of-the-art security equipment at airports have reduced the instances of gold smuggling.
IBJA expects gold smuggling to increase during Diwali and Dhanteras, as gold purchases by Indians are bound to increase during this period. The advent of wedding season will further hike gold demand in the country. Despite higher demand forecast towards end-2015, the yearly smuggling figure for the year is not expected to surpass 150 tonnes. Also, the Association noted that reduction in gold import duties would result in zero gold smuggling in the country.
PR Somasundaram, Managing Director, World Gold Council India, believes that illegal gold imports into the country have dropped dramatically as incentives to smuggling remains very low currently. Gold prices in India are currently trading at a discount to London prices. Higher imports by banks and other agencies have made the availability of gold easier.