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

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.”


Police hunt killer of Omani student stabbed outside London's Harrods

Updated 7 min 7 sec ago

Police hunt killer of Omani student stabbed outside London's Harrods

  • Mohammed bin Abdullah Al-Araimi attacked as he walked home
  • Pronounced dead outside the famous department store

LONDON: UK police are hunting for the killer of an Omani student who was stabbed to death outside Harrods department store on Friday in a suspected robbery.

Mohammed bin Abdullah Al-Araimi, the youngest son of Omani property developer Sheikh Abdullah Al-Araimi, was attacked as he walked home from spending the evening with a friend, reportedly a Bahraini citizen.

It is believed Al-Araimi, 20, attempted to fight back when attacked before receiving a stab wound to the back and collapsing near an entrance to the department store, according to a report in the Evening Standard.

He was pronounced dead shortly after at the scene on Brompton Road.

The man he was with, also wounded in the incident, has since been released from hospital.

Al-Araimi was a student at King’s College and his relatives, said to be close to Oman’s royal family, were regular visitors to the UK capital.

Detectives investigating the murder said that the motive for the attack was likely robbery, and that Al-Araimi might have been targeted for his Rolex watch.

“Mohammed and his friend were returning home from a restaurant when they were approached and assaulted by two male suspects on Basil Street at the junction of Pavilion Road,” Detective Chief Inspector Andy Partridge said.

“The victim and his friend were entirely blameless, simply enjoying a meal out together. It does appear that the motive for this cowardly attack was robbery.

“Following the attack, the suspects fled on foot along Basil Street in the direction of Sloane Street.

“I would appeal to anyone who saw two males running along that route, or to drivers who were in Sloane Street around midnight and may have captured any part of this incident on dash-cam footage, to get in contact with my team immediately,” he added.

However, robbery as a motive was dismissed by Al-Araimi’s family in a short statement in which they said his murder being related to the theft of a watch was false.

“The police have confirmed that his possessions were not taken, and he was not wearing a watch at the time of this horrific attack,” the statement read.

The Omani Embassy released a statement, saying: “A regrettable stabbing attack took place, claiming the life of the Omani student, Mohammed bin Abdullah Al-Araimi. With great sadness and sorrow, the Embassy in London extends its condolences to the family of the deceased.”

The attack also prompted the UAE embassy to warn its citizens on Twitter against “wearing valuable items” given a recent spike in attacks on "citizens of Arab Gulf states.”

Attacks on Arab citizens have increased in London in the past five years, the most high-profile of which saw three Emirati women being bludgeoned to death in an attempted robbery in 2014 at the Cumberland Hotel.