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How and why is Gold smuggled into Goa?

There are numerous reports being filed country wide about gold worth thousands, lakhs and sometimes even crores being smuggled into the country. It is not a surprising phenomenon since the Central Government had hiked the import duties on gold. Gold smuggled into the country is being sold at a cheaper rate compared to the gold brought in through legal means.

Why does India import so much gold?

India does not produce enough gold to satisfy the local demand for the precious metal. Hence the country needs to import the metal from foreign markets. Culturally, Indians have preferred gold as a form of investment for future needs. The gold smuggled in India through Goa satisfies this need.

Some reasons for Indians to invest in gold:

  • Educational purposes
  • Marriages
  • In case of emergencies (medical expenses)
  • Safe keeping (cash is easily spent)

Bad effects of importing gold

High demand in gold upsets India’s trade. The country suffers a trade deficit when imports are more than exports. Since the global markets weren’t doing well in recent years, India’s exports declined. On the other hand the country’s imports increased and gold was high on the shopping list. Importing gold meant the trade deficit would continue to widen. To curb this phenomenon, the Indian authorities increased the import duty on the precious metal. This led to the fall of gold imports by 50%. For the first six months of 2016 only 199 tonnes of gold was imported, against 402 tonnes in the first six months of 2015.


The idea was that gold prices would go up and the demand would come down. Unfortunately one of the side effects of this move was smuggled gold entering India. With Goa receiving international flights, this became one of the points of entry for smuggled gold.

Methods of smuggling gold into Goa

Gold is being smuggled in a very sophisticated manner with the same pattern being followed often. One person gets the gold smuggled aboard the plane, while another person gets it off the plane. However this may not always be the case.

Some other Methods:

  • Fruit such as dates are used in which gold is inserted as seeds
  • Gold belt buckles and watches
  • Gold Screws in suit cases and electronic items
  • Mobile phones and torch-lights  (replacing the battery with gold biscuit)
  • Electric shaver (made of gold with silver coating)
  • Footwear (making a hole in the footwear to smuggle gold which is normally not scanned by customs officers)
  • Suitcase beading (using gold beading with silver coating)
  • Hot plates (springs and coil is made of gold)
  • Thermos flasks (using foil made of gold)
  • keys (made from gold but coated with silver)
  • Of course the classic method, a human body -from mouth to rectum everything is used.

Positive development

The Central Government has recently announced that excise duty exemption will be raised to Rs. 10 crores from the previous Rs. 6 crore figure. It may not highly impact the amount of gold smuggled into India, but to some extent increase the amount of legally imported gold being used.

Gold smuggled into the country creates an imbalance in the business ecosystem. No one should be allowed to  posses unfair power over others.

Image source – The Indian Express

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