Gold Smuggling Into India Moving Higher?
Gold Smuggling Into India Moving Higher? by Rory for The Daily Coin
With the nature of gold smuggling being an opaque operation it’s difficult to know very much about what is actually happening. The nature of smuggling is built upon secrecy. We can say with confidence that gold has been smuggled into and out of India for hundreds, if not thousands, of years. There are some records of the activity just not enough to paint a very clear image of what is happening and, most importantly, the volume of gold moving in and out of the country.
It also makes sense that whenever the government of India decides to put the squeeze on gold by raising import taxes, unleashing a new “tariff” (read tax) or makes some type of policy change involving gold the volume of gold smuggling should and probably does increase. Depending on the desired impact of the policy change I would imagine the smuggling of gold has risen quiet dramatically.
The India government just announced a brand new shiny tax, called an “import duty” on gold. The government is predicting a drop in demand by 2.4% because of this new tax. These policy makers are 100% correct. There will be a measurable drop in “officially imported gold” into India. What they fail to report is the fact there will be and an equal and opposite reaction to this import duty. That reaction, possibly of equal or greater proportions will be in the range of 2.4% of smuggled gold.
The increase in gold import duty to 12.5 per cent from 10 per cent by India from July 5 could cause consumer demand for the metal to reduce by approximately 2.4 per cent in 2019, miner’s lobby World Gold Council forecasts in its Gold Mid-Year Outlook 2019. WGC added that if the higher duty becomes permanent, long term consumer demand would reduce by “slightly,” less than 1 per cent a year.
Consumer demand for gold in China was 994.3 tonnes against India’s demand of 760.4 tonnes in 2018. In the quarter through March 2019 demand in China stood at 255.3 tonnes against 159 tonnes for India. Source
While all the talking heads sit around and attempt to curb gold moving into the hands of the Indian population they always overlook the main reason the people of India want so much gold in the first place – a complete and absolute distrust in the talking heads sitting around scheming how to steal more from the people of India. In never occurs to these thieves that maybe, just maybe, if they worked with the people and FOR the people maybe a bridge of trust could be discussed. In the meantime, I would bet a dollar-to-a-dime gold smuggling into India just went up.