India Gold Smuggling Slowed by Election Seizures of Cash, Bullion

MUMBAI: India’s gold smugglers have slowed their operations over worries their shipments will be caught up in seizures of cash, bullion, booze and drugs that are aimed at controlling vote-buying in the country’s national elections, industry officials told Reuters.

In India, political parties and their supporters often offer money or goods in exchange for votes. The Election Commission, which monitors the polls, tries to prevent this by setting up highway checkpoints to seize cash, gold, liquor and other high-value items that candidates avoid mentioning in their expenses due to a cap on the amount they can spend.

Last month in Mumbai, in one of the biggest seizures since the current election was announced on March 10, the Directorate of Revenue Intelligence seized 107 kg of gold, worth about 300 million rupees ($4.3 million).

The slowdown in smuggling has boosted gold imports at banks in the world’s second-biggest buyer of the precious metal, allowing them to charge a premium over global prices.

After a big seizure in Mumbai, smuggling has gone down drastically. Grey market operators don’t want to take the risk during the election period,” Anantha Padmanabhan, chairman of c(GJC) told Reuters.

Election Commission of India, as of April 14, has seized $365 million in cash, liquor, gold, drugs and other goods over the last month, more than double the $172 million confiscated in the last election cycle in 2014.

The random checking of vehicles and seizures have made it nearly impossible for smugglers and other “grey market” operators to move cash and gold from one place to another, said the head of the bullion division at a Mumbai-based private bank.

“This is helping banks. Our gold business has improved in the last few weeks,” he said.

Courtesy: Livemint.com