Mumbai: Just days before Dhanteras and Diwali, gold prices in India have hit a record high of Rs 1,30,087 per 10 grams in retail. That’s a 67 percent jump this year alone. As prices soar, smuggling activity is also picking up again. Traders and officials say illegal gold imports are becoming more profitable, and smugglers are seizing the opportunity during the festive demand rush.
Why Smuggling Is Back
Last year, gold smuggling had slowed after the government reduced import duty from 15 percent to 6 percent, making official imports more affordable. But this year, the sudden price spike and shortage in supply are giving smugglers a new chance. They can now make a profit of over Rs 11.5 lakh per kilogram by avoiding the 6 percent duty and 3 percent local tax.
A Mumbai-based bullion trader told Reuters that as prices keep going up, the risk is worth the reward for illegal traders. Another trader in Chennai said smugglers are now able to sell gold within hours, thanks to high demand and limited official stock.
Premiums Soar as Supply Falls Short
Authorised importers and banks are struggling to meet the heavy demand ahead of Diwali. Many jewelers have complained about gold shortages, and the premium on gold has shot up to USD 25 per ounce above official prices — the highest in over 10 years.
A Kolkata jeweler said buyers are looking at gold as a safe option amid global tensions and a weak rupee, which is adding more pressure on the legal supply chain.
Agencies Step Up Vigilance
The Customs and Directorate of Revenue Intelligence (DRI) have confirmed a rise in smuggling cases, especially at airports in southern and western India. So far this fiscal year, authorities have already seized 2.6 metric tons of smuggled gold and registered over 3,000 cases.
Why the Rush Before Dhanteras
In India, Dhanteras and Diwali are seen as very lucky times to buy gold. People believe gold brings prosperity, and the festive and wedding seasons together create the year's highest demand. This tradition, combined with rising prices and a weakening rupee, is pushing smuggling into overdrive again this year.
