Why is gold smuggling increasing?
Continuous action is being taken against smuggled gold in the country. Directorate of Revenue Intelligence officials recently seized 15 kg of smuggled gold and 20 kg of silver in operations conducted across the country. This is not an isolated incident. Government data shows that from the airport alone, from the financial year 2022-23 to October 2025, the Customs Department and DRI seized a total of 8,598.18 kg of gold, which is worth about Rs 5,003.60 crore. The government increased the import duty to control the purchase of gold. Now cases of gold smuggling are coming to light. In such a situation, the question arises that from where is so much gold coming to India, from which countries is it coming and is the increasing gold import also a reason behind this? Let us try to understand the entire nexus of this gold.
According to the data presented in Parliament by the Central Government, a total of 13,213 cases of gold smuggling were registered at the airport from 2022-23 to October 2025. In 2023-24, both smuggling and its arrest remained at their peak. In this one year itself, about 43% of the total gold seized in four years was seized. After this, seizures continued at the airport and this figure increased to more than 8000 kg in the year 2025.
Where is the gold coming from?
Most of the smuggled gold in India comes from Gulf countries, especially United Arab Emirates (UAE). The interesting thing is that there is no gold mine in UAE itself. There also gold is imported from other countries. UAE buys a large part of its gold from African countries, from where about 57% is imported. Countries like Mali, Sudan, Uganda are prominent in this. Apart from this, raw gold is also brought from Türkiye and Switzerland and refined. This refined, cheap gold later reaches India through smuggling. According to the Chatham House report “Gold and the war in Sudan”, between 2012 and 2022, the UAE imported 2,569 tonnes of gold from Africa which was not recorded as export by African countries, whose value was estimated at about $115.3 billion.
Now this question might be coming in your mind that why does India not directly import gold from Africa, why does Dubai come in between? The reason for this is the rules and regulations. Most of the African countries are out of the safe gold list of global organizations like FATF, OECD and LBMA, hence buying them directly is legally wrong. But UAE takes gold from there informally, refines it at home and then sells it in the international market. Smuggling also takes place under the guise of this. The same thing has come to light in the report of a global NGO ‘Impact’. India has been described as the world’s largest gold-smuggling hub, where gold travels from East Africa (Tanzania, Uganda) through a network of dealers of Indian origin.
Recent DRI actions have also exposed some other routes-
Bangkok- Mumbai Transit Route- Bangladeshi and Sri Lankan carriers coming from Bangkok were caught delivering gold while in transit at Mumbai airport, the collusion of the airport staff was also revealed in this.
Saudi Arabia Route- Gold-dust was brought in the form of wax by passengers coming from Medina to Mumbai.
America Route- A case of gold smuggling from America to India through airline crew members has also come to light.
Why is smuggling happening?
Big difference in price –In UAE and Gulf countries, gold is cheaper than in India, this profit promotes smuggling.
Evasion of import duty- To save custom duty, people secretly bring more gold than the prescribed limit.
Indians working in Gulf- Most of the smuggling from Dubai and Gulf countries involves laborers who go there to work, who bring with them gold worth lakhs of smugglers network due to a little greed.
Insider Network- Not just individual passengers, but entire organized syndicates involving airport staff, handlers and even the gold melting facility have been caught.
Unique ways- Gold is being brought into the body by converting it into paste, wax or dust, swallowing it in capsules, or hiding it in the metal frame rods of luggage.
Rise in gold imports and PM Modi’s appeal
India imports about 99% of its gold requirement from abroad, because only 1,000-1,500 kg of primary gold is produced every year from domestic mines. In contrast, the country imports an average of 700-900 tonnes of gold every year. In the financial year 2025-26, it was around 721 tonnes, but due to increasing prices, its bill reached a record $ 71.98 billion, which is 24% more than last year. In a rally in Hyderabad in May, PM Narendra Modi appealed to the countrymen not to buy gold and silver for the next one year in the national interest. He repeated this appeal for the second time in a few days. After this, the government directly increased the import duty on gold and silver from 6% to 15%. This includes 10% basic custom duty and 5% Agriculture Infrastructure and Development Cess (AIDC).
This is not the first time that the government has had to increase duty to control the purchase of gold. After independence, ‘Gold Control Act’ was implemented in 1962 and 1968 to save the dollar. However, due to smuggling and black marketing, it was canceled in 1990. After this, the duty was reduced to 7.5% (effectively 10.75%) in the 2021 budget, but it had to be increased again in July 2022 due to the strengthening of the dollar and increasing pressure on the rupee due to the Russia-Ukraine war. That is, every time the pressure on the dollar increases, gold imports become the target of the government and this strictness often makes smuggling more attractive, because the higher the duty, the higher is the profit of smugglers.
How much gold comes from smuggling?
Smuggled gold comes through illegal routes, so it is difficult to get exact figures, but some estimates exist. According to the World Gold Council (WGC), during the implementation of GST, about 100-120 tonnes of illegal gold was estimated to come to India every year, whereas in the previous year this figure was about 119 tonnes. WGC had warned that the tax gap of about 13% including custom duty and GST creates a huge profit opportunity for smugglers. According to an estimate based on data from the Corona period, while India imports 800-900 tonnes of gold legally annually, about 200-250 tonnes of gold was estimated to come through smuggling. This means that even in comparison to legal imports, the figure of smuggling is not insignificant. This is a large and consistent part of India’s total gold consumption.
Indians’ connection with gold is not just an investment, it is also a tradition and an emotional matter, which is why India is number one in the number of gold buyers in the world. The greater the demand, the greater the legal imports and the greater the potential for smuggling to flourish, especially as increases in duty make smugglers’ profits more attractive. The continuous actions of DRI and Customs Department are proof that despite the strictness, this business is not going to stop.
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