Analysing the increasing cases of gold smuggling in the city, sources in the Directorate of Revenue Intelligence (DRI) and Customs department claimed that lower gold prices at Gulf countries is one of the major reasons that attracts smugglers to smuggle gold from there and sell them in the local market in Mumbai at higher prices. The DRI in a report last year had stated that India has become a major destination for illicit gold imports, with gold and silver predominantly originating from Gulf states such as the UAE and Saudi Arabia, where these metals are sourced and available at lower prices.
India as a Prime Destination
"Gold smuggling in India typically follows a “hub and spoke” model, where the contraband reaches central hub locations after being smuggled into the country and is then distributed to various destinations. During the financial year 2023-24, DRI seized 1319 kg of gold, with land route contributing 55% of the seizures and air route contributing around 36%. Additionally, DRI has shared actionable intelligence with Customs field formations, leading to significant gold seizures by those units as well," DRI had stated in its report.
Hub-and-Spoke Model of Smuggling
Gold smuggling into India through its land borders, particularly from Myanmar, Bangladesh, and Nepal, remains a persistent and complex issue. Air routes into India also remain a prominent method used by smugglers, with Middle East and Southeast Asian countries traditionally being the major points of origin. Recently, airports in certain African and Central Asian countries have also emerged as key locations for smuggling operations, the report stated.
Land and Air Routes in Use
Gold smuggling in India has evolved with smuggling syndicates now employing “mules” with diverse profiles, including foreign nationals and families, alongside insiders. Smuggling syndicates even leverage international departure gates, where airport workers and other staff collude in smuggling gold from transit passengers. There has been a noticeable increase in the number of carriers employed by smuggling syndicates to transport smaller quantities of gold, reducing potential losses in case of interception by law enforcement agencies.
High-Risk States Identified
"Study of quantity of gold seized state wise indicates that West Bengal, Tamil Nadu, Maharashtra and Uttar Pradesh are the primary zones of high seizure activity, capturing a substantial proportion of the overall gold intercepted. These regions serve as critical entry points or transit hubs for smuggling networks due to their strategic coastal locations, major ports, and transit routes. The geographical distribution of these seizures emphasizes the extent and reach of DRI’s enforcement measures and the close monitoring of emerging patterns," the DRI's report stated.
Price Difference Encourages Trafficking
"Gold is smuggled into India through two primary methods such as commercial smuggling, where export and import schemes are exploited to evade duties, and outright smuggling, where gold is transported into the country by concealing it to avoid detection. For instance, if the price of 24 KT gold in Dubai is around Rs 96,000 for 10 grams, in India the price would be around Rs 1.01 lakh. The smugglers would buy gold in bulk in Dubai when the price is lower and would then traffic them to India through smaller consignments. This gold would be peddled in the local market and they earn decent profit," said a former Customs officer.
