The absurd “War on Gold” that India has launched this year has been covered many times on this site. From the moment I read about it, it was obvious that if Indians want their gold, the Indians will have their gold. You can’t break thousands of years of tradition and culture because of the ignorant whims of a few bureaucrats.
Earlier today, Reuters published an article detailing the extent to which Indian smugglers will go in order to bring the money of kings into the country. This includes hiding it in underwear, swallowing it whole and even painting gold staples gray. What is most disturbing is the lengths authorities are willing to go to in order to stop a supposedly free people from buying a brick of metal. From Reuters:
(Reuters) – Indian gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.
Stung by rules imposed this year to cut a high trade deficit and a record duty on imports, dealers and individual customers are fanning out across Asia to buy gold and sneak it back into the country.
Sri Lanka, Thailand and Singapore are the latest hotspots as authorities crack down on travelers from Dubai, the traditional source of smuggled gold.
Stop one and another will rise. As always.
In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers.
Because that makes a so much sense.
“There has been a several-fold increase in gold smuggling this year after restrictions from the government, which has left narcotics behind.”
That suggests official data showing a sharp fall in gold buying, which has helped narrow India’s current account gap, may significantly underestimate the real level of gold flows.
Last week, Sri Lanka limited the amount of jewellery its residents can take out of the country and it will try to monitor whether they bring it back. Pakistan banned all gold imports in August for a month as it believed much was being smuggled on into India.
Indian gold premiums have soared to $130 an ounce over London prices due to the supply crunch, compared with about $2 an ounce in Hong Kong, Singapore and Thailand.
In June, a passenger flying from Dubai was caught at New Delhi airport with about 755 grams (1.7 lbs) of solid gold staples painted grey. Officials stopped the man because the cardboard boxes he was carrying were stapled far more than seemed necessary.
“We are trying to plug all the loopholes. We have strengthened our anti-smuggling staff and installed door metal detectors,” said S.A.S. Navaz, deputy commissioner of customs in the south Indian city of Kochi. “We are spending sleepless nights.
Sleepless nights because citizens want to buy a piece of yellow metal. You might have bigger problems than gold champ.
In an effort to change that, Mumbai customs offers a reward of up to 50,000 rupees per kg of bullion seized for informers in gold smuggling cases. Cocaine and heroin informers get only up to 40,000 rupees and 20,000 rupees respectively.
Full article here.
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