New Delhi: The COVID-19 lockdown has crushed the inflow of gold smuggled into India, the world’s second-biggest consumer.
Illegal shipments of gold to India are estimated to have slowed to a trickle of about 2 tons a month, and may total about 25 tons this year, according to the Chairman of the All India Gem and Jewellery Domestic Council, N Anantha Padmanaban.
That compares with an estimate of as much as 120 tons last year, according to a report by news agency Bloomberg.
Illegal shipments have been hit by one of the world’s strictest lockdowns, which was announced in March and halted international flights among other measures.
“There were no flights in the last six months and so there has been a negligible amount of smuggling. Whatever is being smuggled is coming from land borders with Nepal, Pakistan, Bangladesh and Sri Lanka and not much from airports,” Padmanaban said.
That has pushed the monthly average of smuggled gold caught at Indian airports to a six-year low of 20.6 kg in the year started April, according to Bloomberg calculations based on finance ministry data.
Smugglers of gold have benefited from record high prices and a 12.5% import tax that India imposes on shipments of the metal and additional local taxes, making illegal purchases cheaper. Jewellers have been seeking a cut of at least 50% in the import tax to reduce the inflows and legalize the imports.