How smuggled gold from Dubai floods Indian markets despite strict checks

Hyderabad: Come wedding season, the jewellery market comes alive with shoppers. Despite the skyrocketing gold prices, consumers enthusiastically make the purchases.

However, all is not well in the market. Smuggled gold is flooding Indian markets. The biggest factor prompting gold smuggling is the huge gap in its price between Dubai and India. In the current time, gold costs about Rs 6.25 lakh per kg less in Dubai, and with the evasion of the three percent GST, the gap climbs up to Rs 9.5 lakh, making it lucrative for the syndicates.

The pushing of smuggled consignments with the regular merchandise is evident from the fact that the annual import of gold in India is 700 to 800 tonnes, whereas the consumption stands at around 1000 tonnes. This means about 200 to 300 tonnes of gold is smuggled into India, primarily from Dubai, every year.

Despite the introduction of Hallmarking by the government, which is the proof of the purity and authenticity of gold, the buyers of smuggled consignments manage to push the same into the market by obtaining fake invoices from Unregistered Dealers (URD) who do not have GST registration. These fake invoices are used to get the jewellery made out of unauthorised gold, Hallmarked.

To obtain the Hallmarking, jewellers need to submit a trail of documents that also include details of the origin of the gold. Sources in the jewellery market said that the buyers of the smuggled gold obtain fake purchase invoices from certain URDs who are small-scale traders. The bills are obtained at a one to two percent commission of the total value.

Sources further said that the unscrupulous jewellers take multiple bills of small amounts to bypass the taxation system and avoid the attention of the authorities.

Once the bills are obtained, the jewellers buying the smuggled gold send the same to refineries of their choice and generate vouchers showing refining of the gold to make jewellery. The vouchers are shown as payment to karigars (artisans) who refine the gold. The paper trail is then used to obtain the Hallmarking.

Vijay Goyal, Industrialist and Economist, from Raipur, Chhattisgarh, said that most unscrupulous jewellers show the consignment as a purchase of stocked gold from URDs and then refine the same to make jewellery. He said in some cases, those delivering the smuggled gold give fake bills to the jewellers.

Goyal said that gold import, legal and illegal, is going to increase in the future because after the withdrawal of the Rs 2,000 denomination notes from circulation, there is an increased trend of bribe payment in gold coins and bars. Besides, he said, big hawala transactions (informal channel of transferring funds) are being done using gold.

Kumar Jain, spokesperson, India Bullion and Jewellers Association Ltd (IBJA), said some traders who sell illegal gold manipulate the procedure to push the consignment in the market. He agreed that the smuggled gold costs much less to unscrupulous traders, and they earn big profits by selling the same at market price. ‘Some of them sell these at a lower price to attract gullible customers,’ Jain said.

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SOME RECENT GOLD SMUGGLING ATTEMPTS

August 22, 2025 - The Directorate of Revenue Intelligence (DRI), Hyderabad Zonal Unit, foiled two smuggling attempts at Rajiv Gandhi International Airport and recovered 3.38 kg of foreign-origin gold valued at Rs 3.36 crore.

July 20, 2025 - The Air Intelligence Unit (AIU) of Ahmedabad Customs made a major gold seizure of 24.827 kg valued at Rs 25.57 crore at Surat International Airport, making it one of the biggest gold seizures in Gujarat. The gold was being smuggled by a couple from Dubai to Surat.

June 22, 2025 - In a meticulously planned overnight operation codenamed “Operation Alchemist,” the DRI, Mumbai Zonal Unit, busted a major illicit gold melting facility that was involved in processing the precious metal smuggled from Dubai into India via carriers recruited by an organised syndicate. The raiding team seized 8.74 kg of gold in bar form worth Rs 8.93 crore.

May 17, 2025 - In two cases, Customs officers at the Chhatrapati Shivaji Maharaj International Airport (CSMI), Mumbai, seized 5.75 kg of gold valued at Rs 5.10 crore. Two people who had concealed the gold in the inner clothes and pocket of the jacket were arrested.

March 17, 2025–Officers from the DRI and the Gujarat Anti-Terrorism Squad (ATS)

raided a residential apartment in Paldi, Ahmedabad, and recovered 87.92 kg gold bars, worth around Rs 80 crore. The majority of the gold bars had foreign markings, indicating that these were smuggled into the country.

March 3, 2025 -DRI officials intercepted a woman passenger carrying foreign-origin gold bars worth Rs 12.56 crore at Kempegowda International Airport, Bengaluru. She had arrived from Dubai to Bengaluru and had concealed 14.2 kg of gold on her person. The officers subsequently searched her residential premises at Lavelle Road in Bengaluru, and seized gold jewellery worth Rs 2.06 crore, besides Indian currency amounting to Rs 2.67 crore.