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The latest figures indicate that higher import duties have encouraged more smuggling attempts, prompting Customs officials and the Directorate of Revenue Intelligence (DRI) to intensify surveillance across airports, seaports, and land borders.

Gold Seizures Nearly Double After Import Duty Revision

According to data tabled in the Lok Sabha, Customs authorities seized 160.91 kg of gold in 287 cases between May 13 and June 30, 2026.

Before the revised duty became effective, officials had confiscated 86.16 kg of gold across 165 cases during the period from April 1 to May 12, 2026.

The comparison shows that both the quantity of gold seized and the number of smuggling cases increased sharply after the import duty hike.

Arrests Rise Alongside Smuggling Cases

The increase in smuggling activity was also reflected in the number of arrests made by Customs officials.

Between May 13 and June 30, authorities arrested 116 individuals in connection with gold smuggling. During the previous period, 67 people were arrested, indicating a notable rise in enforcement actions.

Officials said surveillance has been strengthened at major entry points to detect and prevent illegal imports.

Silver Smuggling Also Sees Significant Increase

Gold was not the only precious metal affected. Silver smuggling also recorded a substantial rise after the revised duty structure.

Customs seized 535.95 kg of silver in 16 cases between May 13 and June 30, compared with 49.53 kg in seven cases during the earlier period.

The data suggests that smugglers have increasingly targeted both gold and silver following the higher import duties.

Government Reaffirms Strict Action Against Smuggling

The figures were shared by Minister of State for Commerce and Industry Jitin Prasada in a written reply to the Lok Sabha.

The government said Customs formations and the Directorate of Revenue Intelligence (DRI) continue to maintain round-the-clock monitoring and intelligence-based operations to curb the illegal import of precious metals.

Authorities added that all detected smuggling cases are dealt with under the Customs Act, 1962, including seizure and confiscation of gold and silver, along with the arrest and prosecution of those involved.

Gold Smuggling Trend Over the Last Four Financial Years

• 2025-26: Customs seized 646.66 kg of gold in 836 cases, leading to the arrest of 508 people.
• 2024-25: Customs seized 2,600.40 kg of gold in 3,005 cases, resulting in 1,240 arrests.
• 2023-24: Customs confiscated 4,971.68 kg of gold in 6,599 cases, with 2,003 people arrested.
• 2022-23: Customs recovered 4,342.85 kg of gold in 4,619 cases, leading to 1,740 arrests.

What the Latest Data Suggests

The latest Parliamentary data points to a clear increase in gold and silver smuggling attempts after the import duty revision. While illegal trade appears to have intensified, enforcement agencies have also stepped up surveillance and seizures. The government says it will continue strengthening monitoring and taking legal action to curb smuggling activities across the country.

FAQs

1. Why has gold smuggling increased in India?
Parliamentary data suggests smuggling attempts increased after the government raised import duties on gold and silver on May 13, 2026.

2. How much gold did Customs seize after the duty revision?
Customs seized 160.91 kg of gold in 287 cases between May 13 and June 30, 2026.

3. Did silver smuggling also increase?
Yes. Customs confiscated 535.95 kg of silver in 16 cases, compared with 49.53 kg in seven cases before the duty revision.

4. What action is the government taking against smuggling?
The government says Customs and the Directorate of Revenue Intelligence (DRI) have intensified surveillance at airports, ports, and border checkpoints and continue to take action under the Customs Act, 1962.

5. What does the latest Parliamentary data indicate?
The figures indicate that smuggling attempts increased after the import duty hike, while enforcement agencies also strengthened monitoring, resulting in higher seizures, arrests, and prosecutions.

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The Statistical Proof: High Duties Equal High Smuggling

Excluding the anomalous COVID-19 pandemic years (2020–2021), the WGC report establishes a striking positive correlation of 0.52 between India’s official import duties and the volume of smuggled gold entering the country. This statistical benchmark confirms that higher tax rates consistently widen the domestic-to-international price gap, creating a highly lucrative incentive for illicit trade networks.

The historical timeline between 2013 and 2026 showcases an ongoing cycle of tax hikes followed by immediate spikes in black-market activity.

A History of Hikes and the “Sticky” Smuggling Networks

The report highlights two major enforcement periods that backfired, illustrating how quickly illicit supply chains adapt—and how permanently they remain in place:

• The 2013 Shock: Following a 4% duty hike in early 2013, unofficial gold imports experienced a massive seven-fold explosion in under a year, skyrocketing from just 10 tonnes in Q1 2013 to a staggering 70 tonnes by Q1 2014.
• The Persistence Factor: Even when duties stabilized at 10% between late 2013 and mid-2019, smuggled inflows refused to drop, averaging 34 tonnes per quarter. The WGC points out a sobering market reality: once smuggling networks and routes are established, they become incredibly resilient and difficult for law enforcement to unravel.
• The 2022 Surge: A similar pattern played out when the government hiked the gold duty from 10.75% to 15% in July 2022. Unofficial imports nearly tripled, climbing from 17 tonnes in Q2 2022 to roughly 50 tonnes by the end of the year, remaining elevated through most of 2023.

The July 2024 Turning Point: Near-Zero Smuggling

The most compelling evidence for policy reform came in July 2024, when India aggressively cut its gold import duty to 6%.

The impact on the black market was instantaneous. By closing the price gap between domestic markets and international hubs, the financial incentive for smugglers evaporated. Unofficial imports plummeted to near zero almost immediately after the announcement, showcasing that lower tariffs are far more effective at curbing contraband than border policing.

The Border Disruption Outlier: The only prolonged drop in smuggling under high-duty regimes occurred during 2020–2021. However, the WGC attributes this strictly to global COVID-19 travel restrictions and severe border disruptions rather than market compliance.

The data leaves little room for debate: artificial price distortions via high import duties are the primary catalyst for India’s parallel gold economy. For policymakers looking to clean up the bullion supply chain, keeping import taxes low has proven to be the most effective strategy.

FAQ’s

1. What does the WGC report say about gold import duties and smuggling?
The report states that higher gold import duties in India have consistently increased unofficial or smuggled gold inflows by creating a large price gap between domestic and international markets.

2. How did smuggling change after the 2013 gold duty hike?
After the 2013 duty increase, unofficial gold imports surged from around 10 tonnes in Q1 2013 to nearly 70 tonnes by Q1 2014, showing a sharp rise in illegal trade activity.

3. What happened after India reduced gold import duty in 2024?
When India cut gold import duty to 6% in July 2024, unofficial gold imports reportedly dropped close to zero almost immediately as smuggling became less profitable.

4. Why do higher gold duties encourage smuggling?
Higher duties increase the domestic price of gold compared to global prices. This creates a financial incentive for smugglers to illegally bring gold into the country and sell it at higher margins.

5. What is the key conclusion of the WGC report?
The report concludes that lower import duties are more effective in reducing gold smuggling than strict enforcement measures because they reduce the profitability of illegal trade networks.

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Both organizations will convene industry stakeholders to address key challenges in both legitimate and illegal aspects of hand-carried gold. The initiative includes comprehensive research and analysis on the scale of illicit gold trade, focusing on the role of hand-carry methods.

The result will be a set of policy recommendations addressing permissible forms of hand-carried gold, definitions of acceptable personal limits, and the establishment of standardized customs declaration and digital tracking processes.

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In aWorld Gold Council Press Release Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council, stated, “While the majority of gold is responsibly traded through a formal network, hand-carried gold does play a role in illicit trade, and our collaboration with DMCC is pivotal in addressing that challenge to the integrity of the global gold market.

This is also an important component of our strategic Gold247 programme, focused on improving integrity and trust. Together, we aim to establish a framework that tackles the current challenges and also paves the way for a more secure and responsible future in the gold trade.”

Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of DMCC, emphasized, “Stricter measures on hand-carry gold are an urgent priority. The positive impact that this initiative will have on the legitimate gold mining communities across the world is immeasurable. This is a prime example of how Dubai and the UAE are demonstrating a true desire to enact positive industry reforms, so we are proud to be working alongside the World Gold Council on this crucial matter.”

Numerous cases of gold smuggling are reported monthly in India, prompting the Customs Department and Directorate of Revenue Intelligence (DRI) to take proactive measures against the illegal transportation of gold through various airports.