The metal that never gets old has ensnared many with its sheen and led to astonishing stories of greed and crime over the years
The recent arrest of an Indian actor at Mumbai airport for smuggling 14 kg gold from Dubai in a waist belt has brought the infamous and wholesome lure of this precious metal back in focus.
The economics of bringing this commodity from Dubai surreptitiously, i.e., without paying the required import duty, is straightforward.
Gold price in Dubai on March 7 stood at 3,260 AED per 10 gram (UAE Dirham). In dollar terms, the price is $887.63 per 10 gram. In rupee terms, it is Rs 77,281.46.
This is almost 11.58 per cent cheaper than the Rs 87,480 per 10 gram (nearly $1,003.92) gold being sold in Mumbai.
In the international market, gold is trading at $2,908.9 an ounce in New York-based commodity exchange. For 10 gram, it is higher than both Dubai and Mumbai at $1,026.08.
When bringing gold from Dubai to India, the customs duty is imposed based on the Government-notified rate of gold (called ‘tariff value’ or ‘base rate’), not the price at which it was bought in Dubai.
At present, the tariff price of gold stands at $927 per 10 gram. It was reduced on February 28 by the Central Board of Indirect Taxes and Customs (CBIC) from the $938 earlier.
The import duty of gold stands at 6 per cent. It was reduced from 15 per cent to 6 per cent in the Union Budget 2024-25 by Finance Minister Nirmala Sitharaman.
If one brings gold from Dubai, a 6 per cent duty is levied on the gold tariff value of $927, which comes out to be $55.62. If this is converted into rupee, it will be around Rs 4,842 per 10 gram (taking $1 = 87.06).
Even if one pays $55.62 customs duty on gold from Dubai, the yellow metal will cost $943.25 (Dubai cost of $887.63 + customs duty of $55.62) per 10 gram. In rupee terms, it is Rs 82,119.34, which is cheaper by Rs 5,360 than the Rs 87,480 in Mumbai.
Under the Passport Act of 1967, Indian passengers are allowed to carry up to 1kg of gold, with specific duty-free allowances: 20 gram for men and 40 gram for women (with a value cap of Rs 1 lakh only in the case of a woman passenger.
Children are allowed to bring 20/40 grams of gold, with a value limit of Rs 50,000/ Rs 1,00,000 depending on gender.
Passengers of Indian origin or those with a valid passport returning to India after at least six months of staying abroad are permitted to import gold in their baggage. However, brief visits made during this six-month period will be disregarded if they do not exceed a total of 30 days and if the passenger has not already taken advantage of this exemption during those short visits. Importing gold in baggage is strictly prohibited for all other passengers.
The other-worldly allure
Ever wondered where the gold came from, inside the earth? Well, it is now established that all the gold on earth likely came from supernovae and colliding neutron stars that occurred billions of years ago. It then settled into earth’s core during planetary formation.
Shines for ever ✨ – Gold is one of the least reactive elements, meaning it doesn’t tarnish, rust, or corrode. That’s why ancient gold artifacts remain shiny even after thousands of years.
You can eat it too 🍽️ – Gold is biologically inert, meaning it passes through the body without being absorbed. That’s why it is used in luxury foods like gold-covered chocolates, sushi, and even coffee!
Slim trim🪶– Gold is so malleable that a single gram can be beaten into a sheet covering a square meter. It can also be stretched into a wire more than 2 km long!
Golden waters 🌊 – The world’s oceans contain about 20 million tonne of dissolved gold, but there’s no cost-effective way to extract it yet.
Runs in blood🩸– An average human body contains about 0.2 milligrams of gold, mostly in the blood. Some researchers believe it plays a role in joint health.
Cosmic gold 🌠 – Astronaut helmets have a thin gold coating on the visors to protect against solar radiation.
Rare metal🔎– If you collected all the gold ever mined, it would fit into three Olympic-sized swimming pools — that’s how scarce it is!
Runny gold🔬– If mixed with the right proportions of mercury, gold can exist in a liquid state at room temperature.
Invisible gold💎– Tiny gold particles are often found inside pyrite (fool’s gold), which is why some call it “invisible gold.”
Gold smuggling in India has a long and fascinating history, deeply connected to the country’s economic policies, changing regulations, and Indians’ undying love for gold. Here’s a look at how gold smuggling evolved over the decades:
Pre-Independence era: During British rule, gold imports were heavily taxed and controlled. However, there was little large-scale smuggling since British policies allowed gold to flow in from global markets, albeit with restrictions.
After Independence in 1947, India faced a severe foreign exchange crisis, leading the Government to impose heavy restrictions on gold imports. In 1947, the country’s first Finance Minister R K Shanmukham Chetty introduced the Gold Control Act, making gold imports almost impossible. By 1950s, smuggling networks started thriving, mainly controlled by underworld syndicates operating from Mumbai, Gujarat, and Tamil Nadu. Haji Mastan, one of Mumbai’s first big dons, became India’s most famous gold smuggler during this time. He worked closely with international smugglers in West Asia, bringing in gold through dhows (wooden boats) along the Gujarat and Mumbai coastlines.
… or by crook
In 1968, the Indira Gandhi government introduced the Gold Control Act, banning Indians from holding more than 50 grams of gold in bars or coins. Demand for gold skyrocketed, and smuggling operations became more sophisticated.
Major players emerged, including Dawood Ibrahim, Haji Mastan, and Muthappa Rai, who smuggled gold from Dubai, Sri Lanka, and Southeast Asia.
The D-Company (Dawood Ibrahim’s gang) started dominating gold smuggling in Mumbai, using secret routes, corrupt customs officials, and even Bollywood connections to launder money.
Gold was often smuggled inside furniture, electrical appliances, and even disguised as biscuits (gold bars shaped like chocolates).
1990s: Liberalisation and decline of gold smuggling: In 1991, India faced an economic crisis, forcing the Government to liberalise trade and relax gold import restrictions. By 1992, the Government allowed gold imports through legal channels, significantly reducing smuggling profits.
2000s-present: Even though legal gold imports became easier, gold smuggling didn’t stop, it just evolved. Smugglers began using airline passengers as “gold mules”, hiding gold inside their bodies or luggage.
Popular smuggling hotspots include Kerala, Chennai, and Mumbai airports, where customs officers frequently catch passengers carrying gold in hidden compartments, electronic gadgets, or even inside their rectums. The 2013 rise in gold import duties to 10 per cent revived smuggling, as the profit margins became lucrative again. The 2020 Kerala Gold Smuggling Scandal, where 30 kg of gold was found inside diplomatic baggage, exposed how even high-ranking officials were involved.
