By Anil Mathews (ScrapMonster Author)
May 11, 2016 08:04:08 AM
NEW DELHI (Scrap Monster): The gold imports by India are likely to touch new highs during the current year, said The Australia and New Zealand Banking Group Limited (ANZ) in its latest forecast report. The group also noted that shipment of gold through unofficial channels is likely to surge during the year. Nearly 15% of the anticipated gold imports by the country are likely to enter the country through smuggling acts. According to ANZ, the existing high import duty of 10% will probably lift up smuggling acts in the country.
Contradictory to industry belief
The forecast by John Levin, Head of Precious Metals, ANZ is against industry belief that overall gold imports and rate of smuggled gold are likely to witness sharp decline in 2016. The import data for 2015 and the initial months of the current year suggests significant drop in gold import by the country. The recent statistics released by the Directorate of Revenue Intelligence (DRI) too denotes considerable fall in gold smuggling incidents through airport and other channels. However, Levin predicts that 15% of the gold to India may reach the country through unofficial channels. The prevailing high gold import duty structure is being cited as the main reason for the anticipated jump in smuggling. Also, the imports of gold dore is expected to surge during the year. Incidentally, gold dores attract lesser import duty of 8.5%.
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. Secondly, implementation of strict security measures and deployment of state-of-the-art security equipment at airports are likely to further reduce the instances of gold smuggling.
Gold smuggling and robbery
In a recent incident, a commandant of Assam Rifles was arrested by Police for being involved in a robbery involving Rs. 14.5 crore worth of gold smuggled from Myanmar. The Special Investigation Team (SIT) constituted by the police had arrested another four people involved with smuggling, who were later remanded to judicial custody.
In another incident, officials had seized huge quantity of smuggled 24-carat gold from a car at Ghoshpukur in north Bengal during end-April this year. The officials, who interrupted the vehicle based on a tip-off, recovered 35 gold bars, each weighing 1 kilogram each. The gold bars were hidden inside two waist belts, wrapped in paper. One of the waist belts contained 20 bars, whereas the other contained the remaining 15 bars. The recovered gold was worth nearly Rs 10 crores.
The data released by the Indian Ministry of Commerce and Industry reveals that imports of gold to India tumbled by nearly 80% during the month of March this year. The imports dropped for the second month in a row, after reporting higher levels during the first month of the year. The imports during March 2016 amounted to $972.96 million, as compared with the imports of $4,984.85 million in March 2015. The Feb ’16 gold imports too had dropped by nearly 30% year-on-year to $1.39 billion.