Gold smugglers ‘make a killing’ in India as grey market outshines hefty tariffs
Illegal gold imports could exceed 100 tonnes this year, threatening US$2.65 billion in government revenue
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 opportunity for smugglers who are able to offer prices legitimate importers cannot match, they said.
The grey market discount has gone beyond US$200 per ounce, or more than 4 per cent, said a Mumbai-based bullion division head at a private gold importing bank, adding that banks were unable to offer even a US$10 discount, let alone one of three digits. He declined to be named because he was not authorised to speak to the media.
The recent resurgence in the grey market suggests illegal imports could exceed 100 tonnes in 2026, said another dealer who also declined to be identified because he was not authorised to speak to the media.
Four other dealers shared the view that illegal gold imports could exceed 100 tonnes in 2026.
At current prices, 100 tonnes of gold would be worth about US$14.35 billion, implying roughly US$2.65 billion in lost tariffs and sales tax.
