Gold smuggling surges in India as prices hit record highs ahead of festive season
At current market levels, smuggling a kilogram of gold can yield profits exceeding Rs 1.15 million, nearly double the margin after the July 2024 duty cut.
- Oct 16, 2025,
- Updated Oct 16, 2025 5:57 PM IST
Gold smuggling across India has surged sharply as domestic prices touch record highs ahead of Dhanteras and Diwali. The festive season traditionally fuels demand for gold jewellery, coins, and bars, but soaring prices and limited supply have made smuggling an increasingly profitable business, news agency Reuters reported. Authorities report a notable uptick in illicit gold shipments, reversing the decline seen after last year’s import duty reduction. Enforcement agencies, including customs and the Directorate of Revenue Intelligence (DRI), have intercepted growing numbers of smuggling attempts at major airports in recent weeks.
At current market levels, smuggling a kilogram of gold can yield profits exceeding Rs 1.15 million, nearly double the margin after the July 2024 duty cut. Domestic dealers are quoting premiums as high as $25 per ounce over official prices — the steepest in more than a decade. “As gold prices keep climbing, smugglers are making bigger bucks. The payoff is now extremely tempting,” said a Mumbai-based bullion dealer.
Banks, struggling to meet surging demand, have pushed premiums even higher on limited stock. A Kolkata jeweller noted that constrained supply and steep bank charges are driving buyers toward unofficial channels. “Banks are unable to meet full demand, and the high premiums make grey-market gold look more appealing,” he said.
Customs data show that in the 2024–25 fiscal year, 3,005 smuggling cases were registered, with 2.6 metric tons of gold seized. Officials believe the true scale of illegal inflows is much larger. The seasonal spike in gold buying — seen as auspicious during Diwali — has amplified this trend, with demand far outpacing the official import supply chain.
Smugglers are reportedly liquidating gold much faster than before. “Earlier, converting smuggled gold took time and carried a high risk. Now, with festival demand so strong, it can be sold within hours,” said a Chennai-based dealer.
Gold prices in India hit a record Rs 128,395 per 10 grams on Thursday, marking a 67% surge since January. Analysts warn that as long as demand remains elevated and official supplies are constrained, grey market activity will continue to thrive. The widening gap between official and parallel channels highlights the challenges regulators face in curbing smuggling amid India’s enduring appetite for gold.
Gold smuggling across India has surged sharply as domestic prices touch record highs ahead of Dhanteras and Diwali. The festive season traditionally fuels demand for gold jewellery, coins, and bars, but soaring prices and limited supply have made smuggling an increasingly profitable business, news agency Reuters reported. Authorities report a notable uptick in illicit gold shipments, reversing the decline seen after last year’s import duty reduction. Enforcement agencies, including customs and the Directorate of Revenue Intelligence (DRI), have intercepted growing numbers of smuggling attempts at major airports in recent weeks.
At current market levels, smuggling a kilogram of gold can yield profits exceeding Rs 1.15 million, nearly double the margin after the July 2024 duty cut. Domestic dealers are quoting premiums as high as $25 per ounce over official prices — the steepest in more than a decade. “As gold prices keep climbing, smugglers are making bigger bucks. The payoff is now extremely tempting,” said a Mumbai-based bullion dealer.
Banks, struggling to meet surging demand, have pushed premiums even higher on limited stock. A Kolkata jeweller noted that constrained supply and steep bank charges are driving buyers toward unofficial channels. “Banks are unable to meet full demand, and the high premiums make grey-market gold look more appealing,” he said.
Customs data show that in the 2024–25 fiscal year, 3,005 smuggling cases were registered, with 2.6 metric tons of gold seized. Officials believe the true scale of illegal inflows is much larger. The seasonal spike in gold buying — seen as auspicious during Diwali — has amplified this trend, with demand far outpacing the official import supply chain.
Smugglers are reportedly liquidating gold much faster than before. “Earlier, converting smuggled gold took time and carried a high risk. Now, with festival demand so strong, it can be sold within hours,” said a Chennai-based dealer.
Gold prices in India hit a record Rs 128,395 per 10 grams on Thursday, marking a 67% surge since January. Analysts warn that as long as demand remains elevated and official supplies are constrained, grey market activity will continue to thrive. The widening gap between official and parallel channels highlights the challenges regulators face in curbing smuggling amid India’s enduring appetite for gold.