Gold smugglers ‘make a killing’ in India as grey market outshines hefty tariffs
India’s sharp increase in gold import tariffs is fuelling a resurgence in smuggling that could exceed 100 tonnes this year, as soaring grey market margins allow smugglers to undercut banks and refiners of the precious metal, industry officials and bullion dealers said. India, the world’s biggest gold market after China, more than doubled import tariffs to 15 per cent in May to curb demand, cut the trade deficit and ease pressure on the rupee. But the move has created an opp
Gold smuggling into India is reportedly on the rise, with estimates suggesting over 100 tonnes could be smuggled this year. This surge is attributed to a significant increase in import tariffs, which more than doubled to 15% in May. The higher tariffs, intended to reduce demand and the trade deficit, have inadvertently created a lucrative grey market. Smugglers are now able to offer the precious metal at prices that undercut legitimate banks and refiners, making the illicit trade highly profitable.
The rise in gold smuggling could undermine India's economic policies aimed at managing its trade deficit and currency.
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