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Unofficial gold imports easing

Increase in legitimate imports of gold, says DRI; However, smuggling of sin goods alarmingly rising; Smuggling in Indian industry verticals --textiles, tobacco products, readymade garments, capital goods and consumer durables--resulted in a loss of Rs1,17,253 cr to economy and also led to loss of 16.36 lakh jobs

Normalcy in war, aggressive US Fed stance to ease gold prices: Emkay Wealth

Normalcy in war, aggressive US Fed stance to ease gold prices: Emkay Wealth

Illicit Trade Menace

- India imports on avg 700-800 tons of gold per annum

- Covid restricted intl, domestic transport

- But cross-border crime syndicates smuggling sin goods using roadways

- DRI seizers rose to Rs93.05 cr in FY21 from Rs 76.95 cr in FY20

- In 2020, $2.2 trn (3% of world GDP) was lost globally due to smuggling

Mumbai: India witnessed a strong resurgence in import of gold in the aftermath of second wave of Covid-19 pandemic. The gold import in 2020-21 was highest in quantum of gold import in last six years. Further, the number of cases of gold smuggling detected post-Covid restrictions also eased. This was due to increase in legitimate imports of gold, as per a DRI report. But there has been huge rise in smuggling of sin goods.

According to DRI report, even as Covid restricted international and domestic transport, the cross-border crime syndicates continued to make big money by smuggling truckloads of sin goods. The seizer made by DRI have rose to Rs 93.05 crore in 20-21from Rs 76.95 crore in

2019-20. The modus operandi is to smuggle it through roads, trucks as the other modes were shut during Covid. Narcotics substances seized rose to 106 kg in 2020-21from 88 kgs in 2019-20. India's merchandise imports witnessed a decline of 16.9 pc during the financial year 2020-21 compared to earlier year. The import duty cases were 500 with a fraud of Rs1,591 crore. It went to over Rs2,800 crore in 722 cases in the year 2020-21. This was involving most of merchandise imports.

Talking to Bizz Buzz, Chirag Sheth, principal consultant, South Asia, Metal Focus, says: "Yes, the gold import is the highest in 2020-21 in past six years. Again, if you average out then you will find that India imports 700-800 tons of gold per annum and it was almost the same over past couple of years. The last two years have been abnormal years due to pandemic."

Lots of weddings remained postponed which have started happening now. Again, keeping in view the ongoing Ukrain crisis, the gold price has gone up by $100 per ounce over past 10-15 days and it will continue until the situation normalises, he added.

In India, widespread smuggling of gold, cigarettes, cosmetics, medicines, jewellery, readymade garments, alcohol, capital goods and consumer electronics severely hurts the country's economy.

According to a 2019 study by Ficci's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE), smuggling in just five Indian industries — textiles, tobacco products, readymade garments, capital goods and consumer durables — resulted in a loss of Rs1,17,253 crore to the economy. It also led to 16.36 lakh jobs being lost.

While policymakers and enforcement agencies around the world continue to do their part, the problem of smuggling can only be overcome by the consumers. That is why, consumer awareness about the harmful effects of smuggled and counterfeit goods on the country, its economy and the people hold great significance.

In a first-of-its-kind initiative in the world, Ficci CASCADE has launched the anti-smuggling Day to generate awareness among consumers and encourage them to boycott illicit goods. "An aware, conscientious and informed consumer can lead the battle against smuggling by engaging with fellow consumers in awareness raising events including social media platforms. Consumers may curb the menace of counterfeiting and smuggling by buying local, eating local and wearing local.

Consumers boycotting smuggled and counterfeited goods will be an icing on the cake," says Hem Pande, former Secretary, Ministry of Consumer Affairs, and Think Tank Member, Ficci CASCADE.

The first ever Anti-Smuggling Day, observed on February 11, in the coming years, will have policymakers and enforcement agencies share a common platform with consumers to discuss ways to collectively defeat the crime syndicates that run large-scale smuggling operations.

The day will also act as a forum for the Indian and international representatives to discuss different ways involving incentives, taxation and enforcement to put an end to this menace.

"Smuggling poses a serious threat to national security and economy, environment, forest and wildlife, and to public health and safety. To contain this menace, it is essential that the efforts made by enforcement agencies of the government like customs, police, and paramilitary agencies are proactively supported by the public. If consumers decide to make purchases only against bills, and only from authorised places and sources, not the dubious/suspicious ones, the threat can be minimised effectively," says PC Jha, former chairman, Central Board of Indirect Taxes and Customs (CBITC), and advisor, Ficci CASCADE.

The menace of illicit and smuggled goods doesn't spare any country. Recently, Singapore's Immigration and Checkpoints Authority revealed that it foiled 93 attempts to smuggle more than 10,000 Covid-19 test kits of different brands in 2021. The Authority also detected four attempts to smuggle ivermectin involving more than 2,500 tablets. Last month, Iranian police disclosed that it had seized smuggled goods worth 1.1 trillion Rials ($4 million) from across the country. In 2020, $2.2 trillion (approximately 3% of world GDP) was lost globally due to illicit trade, according to a World Economic Forum estimate.

Kumud Das
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