Smuggled gold undercuts legitimate imports as duty hike widens price gap

India's sharp increase in gold import duty from 6% to 15% has widened the price advantage of smuggled gold, which now sells Rs 8,000 cheaper per 10 grams compared to legitimately imported supplies.

The duty hike has made legally imported gold significantly more expensive, encouraging consumers to turn to smuggled sources. Estimates suggest over 100 tonnes of smuggled gold could flood Indian markets as a result of this price differential.

The policy change has created a widening gap between legitimate and illicit supply chains, potentially affecting customs revenue and formal sector gold dealers.