Explainer: Why gold smuggling is booming and seizures are growing

After India doubled import duties on gold earlier this year, duty-evaded gold has become far cheaper in comparison. As a precious metal, even a tiny amount of gold earns a fortune for the smuggler.

Gold smuggling networks have come back to life in the few months since the import duty hike in May, triggering a rash of seizures by the Directorate of Revenue Intelligence (DRI). The agency seized around 205 kg of foreign-origin gold till 10 September this financial year, as smuggling thrives even in an age of extensive digital surveillance. The high value of gold and the wide price gap between legal and smuggled gold have revived the practice, undermining the government's effort to curb imports and save forex. Recent seizures have also exposed new routes, methods and facilities used by smugglers.

Mint explains how the practice resurfaced, along with its new methods and routes.

Why does gold smuggling continue?

As a precious metal, even a tiny amount of gold earns a fortune for the smuggler. Its value-to-weight ratio also allows smugglers to conceal significant quantities in luggage, clothing, vehicle parts and machinery. After India doubled import duties on gold earlier this year, duty-evaded gold has become far cheaper in comparison. In May, the finance ministry raised the total import duty on gold, silver and platinum from 9.18% to 18.4. 5%, attempting to curb imports, save forex and protect its current account. At the time, the Gems and Jewellery Export Promotion Council had warned that steep duties could revive smuggling. “The duty was earlier reduced to curb smuggling. With the higher duty now, all security agencies will have to remain alert as such activities may increase,” its chairman Kirit Bhansali had said.

What does the recent seizure data show?

The seizures reveal multiple routes and modes of transport. In April, DRI seized 29.37 kg of gold worth ₹37.74 crore and arrested 24 foreign nationals in Operation Dhahabu Blitz at Mumbai airport. In June, it seized around 17 kg in separate operations in Kolkata and Agartala. The Kolkata consignment was allegedly smuggled from Thailand through Kolkata airport, while the Agartala seizure involved gold allegedly brought across the Bangladesh border. Subsequent seizures were reported from airports, railway stations, border areas, courier facilities and domestic vehicles.

How is the gold being concealed?

In July, gold was found hidden inside aircraft lavatory ceiling panels, specially fabricated utensils, vehicle cavities and on passengers' bodies. In another case, around 4 kg of gold bars were concealed inside a specially created cavity in a passenger trolley at Delhi airport. The August and September seizures involved gold concealed in clothing, vehicles, a treadmill motor, a car gearbox and a coffee machine. The cases show that consignments are being concealed in both personal belongings and modified or ordinary objects used in passenger and domestic transport.

Are airports still the main route?

Airports remain a major channel in the DRI cases, with seizures involving passengers arriving from Thailand, Kenya and Sri Lanka. However, the agency has also found smuggled gold at railway stations, along the India-Bangladesh border, in courier consignments, and in domestic vehicles. In September, DRI reported that two passengers arriving from Sri Lanka at Chennai airport were carrying capsules containing gold in paste form. The agency also reported alleged involvement of airport personnel in some cases.

What role do domestic networks play?

Investigations show some operations involve processing and distribution infrastructure within India, rather than only individual carriers. In June, DRI uncovered an illegal gold-melting facility in Mumbai and said its investigation pointed to the involvement of airport staff, handlers, intermediaries and operators of the facility. In September, the agency found a residential facility in Delhi equipped with machinery for melting, rolling and die-cutting gold.

Why does this matter for enforcement?

The seizures show that gold is being intercepted at multiple stages of the supply chain, from airports and international borders to railways, courier networks, vehicles and processing facilities. For enforcement agencies, this means investigations must look beyond individual carriers to the handlers, transporters, processing facilities and other participants allegedly involved in moving and distributing the gold.

In FY26, India imported nearly $72 billion worth of gold, about 25% higher than the previous year. Gold is imported under different categories. One category covers export-oriented imports under concessional schemes, while the other includes imports by banks, bullion dealers, refiners, trading houses and authorized importers supplying the domestic market.

About the Author

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.