It’s raining gold at Kerala’s Kozhikode international airport. Every plane landing from the Middle East here now carries 40-80 kg of the precious metal, translating into Customs duties between Rs 86.8 lakh and Rs 1.74 crore. That’s just one flight, one airport. The state has two other international airports, at Kochi and Thiruvananthapuram, and the quantity of gold being brought in there is just slightly lower. Kerala gets an average of 120 flights from the Middle East a week. Do the maths. The UPA government first hiked the import duty on gold in January 2012, raising it to 2 per cent, from Rs 300 charged per 10 grams earlier. It was raised to 4 per cent in the budget for 2012-13, 6 per cent in January 2013, 8 per cent on June 5 and finally 10 per cent in August. The government hoped that the steps would check India’s rush for gold — and hence its burgeoning current account deficit. The rush, obviously, continues. What is being seen at Kerala airports, officials suspect, is smugglers using passengers as legal carriers of gold since the last month, ever since the Directorate of Revenue Intelligence (DRI) busted a few gangs, caught bringing in gold using mainly young women. Indians who have stayed abroad for at least six months are allowed to legally bring in up to 1 kg of gold, with import duty paid in foreign currency. Indians travelling abroad can get in gold jewellery worth up to Rs 50,000 in case of men, and Rs 1 lakh in case of women, duty-free. Customs data show that 1,983 kg of gold, mostly in the form of bars, was brought into Kozhikode after paying duty in 2013. There is a duty in dollars amounting to Rs 2.17 lakh on each kilogramme. In November alone, 236 kg of gold landed at the airport. On a December day, the airport saw a flight with 98 passengers bringing in 98 kg of gold. At the Kochi international airport, 3,187 passengers officially brought in 282.65 kg in 2013. Thiruvananthapuram saw 221 passengers bring in 34.37 kg during the last year. While some of these passengers may be bringing in the metal for personal use, the large quantities make it clear that what is being seen is disguised smuggling. It is after nearly 23 years that gold smuggling has returned to the country’s airports, particularly in states like Kerala with a sizeable NRI population. The abolition of the Gold Control Act had opened the door to gold imports. Introduced in 1962, the Act banned individuals from owning gold in the form of bars and coins. In 1990, in the face of a foreign exchange crisis, India pledged 40 tonnes of gold with the Bank of England. When liberalisation came and the licence raj was abolished, the Act was also repealed. Passengers were allowed to bring in 10 kg and 5 kg of gold at different periods. In the second half of the ’90s, the Kozhikode airport in north Kerala — catering mainly to Malappuram district, home to 18 per cent of the state’s expatriates — came to be known as the country’s golden airport with huge legal arrivals apart from what can be presumed was smuggled in. Towards the end of the ’90s, gold smuggling ceased to exist as international and national prices were nearly in the same range. The import duty hike as well as restrictions on gold at home has once again made that picture heavily lopsided. The profit that can be made on 1 kg of gold brought in from the Middle East can be as high as Rs 4.60 lakh. After paying the duty, this is Rs 1.25 lakh to Rs 1.50 lakh. The price differential — with gold prices crashing globally in 2013 but not by much in India — means 1 kg gold now entails larger profits than 5 kg earlier. Between April and November 2013, the DRI arrested 206 people for gold smuggling across India, a jump of over 400 per cent over last year’s figure of 38. The DRI booked 576 cases worth Rs 211 crore in April-November 2013-14, compared to 617 cases worth Rs 52 crore during the April-December period in last fiscal, showing a jump of over 300 per cent in amount seized. Customs and DRI sources admit lacunae in the system. A source said, “As per the law, we are not required to look into a passenger’s financial background. Our concern is only whether the person has stayed abroad for six months and whether he can pay Customs duty in foreign exchange. At present, the smugglers are using low-paid NRIs who are attracted to the commission, which ranges between Rs 50,000 and Rs 70,000.” Kochi Customs Commissioner Dr K N Raghavan says all the seizures that had taken place were following intelligence inputs. “Gold smuggling had come down in recent years. We are now brushing up our intelligence network,” he adds. *** As a first step, officials say smugglers collect from travel agents lists of Indian passengers who have booked tickets home. Their associates back in India then do a background check on the potential carriers for them. Those selected are approached, and coached on what explanation they can give to Customs, if asked, on how they got the money to purchase the gold on them. Before the passengers board the flight, with the gold bars and the documents, the agents in the Gulf MMS their photographs — identifying them and the dress they are wearing — to associates back in India, who wait outside the airport or at pre-designed places to collect the gold. To prevent the passengers from running away with the gold, criminal gangs hired by the smugglers keep a watch around the airport. Apart from legal carriers, gold is smuggled strapped on the body, or concealed in various goods. Gold has been seized in form of staple pins, TV capacitors, laptop batteries and shoe soles. “Passengers are getting involved in large numbers, even high-profile people like diplomats. Typically these carriers fly at least twice a month,” an official says, adding that most of the smuggling is via land and air route. Nepal, Bangladesh and Myanmar are the main countries from where gold is being smuggled into the country via the land route while Dubai, Bangkok and Singapore are the main centres for air route. As regards sea route, most of it is being channelled from Sri Lanka through fishermen. Several passengers coming from Colombo to Kochi have also been caught with the yellow metal recently. The DRI has seized over 60 kg of gold bars from passengers and fishermen coming from Sri Lanka. Once gold has made its way in, it is transported across the country mainly on Rajdhani trains.
Posted on: Mon, 24 Mar 2014 10:15:47 +0000
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