Gold News

India Gold Bullion Imports & Smuggling Up

Government's anti-import rules curb legal gold flows, not demand...
GOLD BULLION smuggling to India – the world's No.1 consumer nation in 2012 – is rising, according to official sources, even as legal imports also rose this month after June's sharp drop.
Not stating how much gold bullion was imported legally, finance minister P.Chidambaram would only tell reporters on Monday that levels so far in July topped last month's 31.5 tonnes.
"Smuggling of gold seems to be increasing month on month," the Wall Street Journal meantime quotes what it calls a senior official in the Department of Revenue Intelligence, a part of Chidambaram's finance ministry.
Trying to cut India's large deficit on the 'current account' of incoming and outgoing money, Chidambaram's government this spring imposed a series of strict anti-gold measures.
First import duty on gold bullion was raised to 8% by value, extending the hikes of 2012 from a starting level equal to 1%. Then importers were required to pay in advance, in full – rather than using credit – for gold bullion shipments.
Earlier in July, the Reserve Bank of India then said 20% of all gold bullion imported to India must now be set aside – in bonded warehouses – for re-export, effective immediately.
Gold smuggling was big business in India prior to deregulation 20 years ago. Last year, official gold bullion imports totaled almost 1,000 tonnes – nearly 1 ounce in every 4 sold worldwide.
April to June saw 32 people arrested for gold bullion smuggling, the unnamed Revenue Intelligence source says. That compared with just four arrests in the same quarter of 2012.
Customs officials seized 10 times the value of gold versus a year earlier, too.
Ahead of the Indian governments new anti-import measures, official gold bullion flows rose sharply, hitting all-time highs in April and averaging 152 tonnes in the two months to June.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

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