India’s Gold Imports Increased by 176% Last Month

Bloomberg reported today that India’s gold imports spiked by 176% for the month of August over the same period last year. The latest numbers are a bit of a surprise to some analysts who believed that official numbers would be equal to or below what they were last year due to the higher import duties placed on the precious metal in the interim. 

The country has recently been dealing with a growing problem of illegal gold smuggling due to the government increasing import duties on gold from 2% to 10%. 

This dramatic increase in official imports is likely only part of the picture as many believe that in addition to the rise in illegal small-time smuggling, that there has also been a rise in illegal large-scale importing. Most of the reports coming in about illegal smuggling are about people getting caught bringing in a few bars or ingots at a time, usually from Bangladesh or Nepal, but recently there have also been a number of stories involving smugglers getting caught with entire boats loaded with gold.  

Smugglers have been getting more creative too, as the crackdown from authorities becomes more intense. Some have resorted to swallowing the gold or hiding it on their body, in their underwear or hollowed out soles of shoes, false luggage bottoms, and stashed in airplane lavatories for later retrieval. One intrepid smuggler was caught when it was noticed that there was an exceptionally large amount of staples used in the boxes for some kitchen appliances he was transporting. The staples were made of gold.   

The World Gold Council predicts that about 200 metric tons of gold will enter into India this year unofficially. 

India is the world’s second largest consumer of gold behind China but ranks first in importing. Together, India and China account for 70% of the world’s gold consumption.

For August of 2013, India imported $739 million dollars worth of gold. This year, the country’s gold imports topped 2 billion for the month of August. That number is expected to be eclipsed this month as physical demand for gold in India always increases around this time of year as the country prepares for religious festivals and the wedding season. 

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