India gold smuggling slowed by election seizures of cash, bullion

India is world’s second-biggest buyer of the precious metal, and gold smuggling surged after the government raised the import duty to 10 percent in August 2013. (AFP)
Updated 15 April 2019
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India gold smuggling slowed by election seizures of cash, bullion

  • In India, political parties and their supporters often offer money or goods in exchange for votes
  • One of the biggest gold seizures since the current election was announced on March 10

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 All India Gem and Jewellery Domestic Council (GJC) said.
India’s Election Commission 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.
Gold smuggling surged in India after the government raised the import duty to 10 percent in August 2013. Grey market operators — businesses that smuggle gold from overseas and sell it in cash to avoid the duties — got a further boost in 2017 when India imposed a 3 percent sales tax on bullion.
The grey market operators can sell gold at discounts to prevailing market prices as they evade paying the 13 percent tax, said Harshad Ajmera, a gold wholesaler in Kolkata.
But this week, even in the cash market, gold was sold at the market price, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
Dealers were charging a premium of up to $2.50 an ounce over official domestic prices, the highest in nearly five months.
Up to 95 tons of gold was smuggled into India in 2018, according to the World Gold Council, although India’s Association of Gold Refineries and Mints and other industry bodies put the figure at more than twice that.
Election Commission rules makes it mandatory for people to show valid documentation if they are carrying more than 50,000 rupees ($722) in cash, or else it could be seized. This rule has been hurting the jewelry industry, especially in rural areas where more than half of gold is bought in cash.
The limit of 50,000 rupees is “too low for the jewelry industry” as even a small 20-gram (0.7-ounce) gold chain costs more than that, said Padmanabhan of GJC.
“Demand has fallen due to the cash restrictions. We have requested that the Election Commission raise the limit.”


Muslims flee, Christians grieve in Sri Lankan town torn by violence

Updated 5 min 52 sec ago
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Muslims flee, Christians grieve in Sri Lankan town torn by violence

  • Church leaders believe the final toll from the Daesh-claimed attack on St. Sebastian’s Church in Negombo could be close to 200
  • Fearing retaliation, hundreds of Pakistani Muslims fled the multi-ethnic port an hour north of the capital, Colombo

NEGOMBO, Sri Lanka: As mourners buried the remains of Christian worshippers killed by the Easter Sunday suicide bomb attacks in Sri Lanka, hundreds of Muslim refugees fled Negombo on the country’s west coast where communal tensions have flared in recent days.
At least 359 people perished in the coordinated series of blasts targeting churches and hotels. Church leaders believe the final toll from the attack on St. Sebastian’s Church in Negombo could be close to 200, almost certainly making Negombo the deadliest of the six near-simultaneous attacks.
On Wednesday, hundreds of Pakistani Muslims fled the multi-ethnic port an hour north of the capital, Colombo. Crammed into buses organized by community leaders and police, they left fearing for their safety after threats of revenge from locals.
“Because of the bomb blasts and explosions that have taken place here, the local Sri Lankan people have attacked our houses,” Adnan Ali, a Pakistani Muslim, told Reuters as he prepared to board a bus. “Right now we don’t know where we will go.”
Islamic State has claimed responsibility for the attacks, yet despite Islamic State being a Sunni jihadist group, many of the Muslims fleeing Negombo belong to the Ahmadi community, who had been hounded out of Pakistan years ago after their sect was declared non-Muslim.
The fallout from Sunday’s attacks appears set to render them homeless once more.
Farah Jameel, a Pakistani Ahmadi, said she had been thrown out of her house by her landlord.
“She said ‘get out of here and go wherever you want to go, but don’t live here’,” she told Reuters, gathered with many others at the Ahmadiyya Mosque, waiting for buses to take them to a safe location.

“I have nothing now“
Sri Lanka’s government is in disarray over the failure to prevent the attacks, despite repeated warnings from intelligence sources.
Police have detained an unspecified number of people were detained in western Sri Lanka, the scene of anti-Muslim riots in 2014, in the wake of the attacks, and raids were carried out in neighborhoods around St. Sebastian’s Church.
Police played down the threats to the refugees, but said they have been inundated with calls from locals casting suspicion on Pakistanis in Negombo.
“We have to search houses if people suspect,” said Herath BSS El-Sisila Kumara, the officer in charge at Katara police station, where 35 of the Pakistanis that gathered at the mosque were taken into police custody for their own protection, before being sent to an undisclosed location.
“All the Pakistanis have been sent to safe houses,” he said. “Only they will decide when they come back.”
Two kilometers away, makeshift wooden crosses marked the new graves at the sandy cemetery of St. Sebastian’s Church, as the latest funerals on Wednesday took the number buried there to 40.
Channa Repunjaya, 49, was at home when he heard about the blast at St. Sebastian’s. His wife, Chandralata Dassanaike and nine-year-old daughter Meeranhi both died.
“I felt like committing suicide when I heard that they had died,” he told Reuters by the open graves. “I have nothing now.”
Meeranhi’s grandmother, with her head still bandaged after being wounded in the attack, was held by a relative as the first handfuls of earth were scattered upon her child-sized coffin.
Most of Sri Lanka’s 22 million people are Buddhist, but the Indian Ocean island’s population includes Muslim, Hindu and Christian minorities. Until now, Christians had largely managed to avoid the worst of the island’s conflict and communal tensions.
There were signs of some religious communities pulling together following Sunday’s outrage.
Saffron- and scarlet-robed Buddhist monks from a nearby monastery handed out bottled water to mourners who gathered under a baking afternoon sun.
But the town, which has a long history of sheltering refugees – including those made homeless by a devastating tsunami in 2004 – may struggle to recover from Sunday’s violence, said Father Jude Thomas, one of dozens of Catholic priests who attended Wednesday’s burials.
“Muslims and Catholics lived side by side,” he said. “It was always a peaceful area, but now things have come to the surface we cannot control.”