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39 Smuggling in India Report 2024-25

Overview

Geopolitical
Gold carries deep-rooted cultural and eco-
Tensions
nomic significance in India, symbolising
much more than its intrinsic monetary
value. As a compact, high-value asset that
Regional
can be easily hidden, moved, reshaped, Conflicts
and quickly liquidated, it has gained wide
acceptance among transnational smug-
gling and money laundering syndicates.
Reciprocal
Gold smuggling has also been traced to the Tariffs
financing of other unlawful activities.

DRI has consistently remained at the fore- Inflationary
front of preventing gold smuggling and Pressures
continues to play a pivotal role in counter-
ing associated threats. Despite increasingly
sophisticated concealment methods, evolv-
Recessionary
ing modus operandi, new routes, and com- Fears
plex financial networks, DRI has been
intercepting illicit consignments and dis-
mantling smuggling syndicates. Macroeconomic factors influencing
gold demand

Understanding Gold Economy In India

In the Indian context, gold serves as a cornerstone of cultural tradition and social
status, often symbolising social prestige and prosperity. Beyond its social and senti-
mental value, gold serves as a stable investment asset amid increasing global vola-
tility due to its physical nature and growing international demand, thus providing
economic security. India’s gold consumption far exceeds its domestic production,
making the country heavily reliant on imports.

Policy shifts, from the restrictive Gold Control era to post-1990s liberalisation,
have influenced both legal imports and smuggling patterns. With import duties
rising from 2% in 2012 to 15% by 2022, incentives for illicit inflows increased.
Although the duty reduction from 15% to 6% in July 2024 was aimed at aligning
domestic prices with global rates, smuggling continued throughout FY 2024-25.

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