The smuggling of gold has lead to money being bled illegally out of the Indian borders. Indian jewelers are trading cash for this precious metal, which has seen a huge spike in demand recently. The Indian government worries that this black market may cause the wealth of India to decline as more and more of their money is being paid to foreigners supplying the gold trade. The government in India is looking to impose new penalties and rules to help crack down on this illegal gold smuggling.
Gold Smuggling Takes Toll On Indian Economy[caption id="attachment_92511" align="alignleft" width="300"] The black market sale of gold from other countries continues to climb, further hurting the economy in India.[/caption] The rise in the price of gold in recent years has made the cost of jewelry sky rocket, in some cases beyond the means of many hopeful buyers. India has been hit particularly hard since they import almost all of their gold from other countries. The Indian government has imposed heavy duties on imported gold, which has contributed to the growth of the black market smuggling of gold into the country. Jewelers looking to meet the demand of their customers have been scrounging for a steady supply of affordable gold during these tightening times.
India has a particular attraction to gold, especially when it comes to ceremony and status. While many are reeling at the prices they see in the bazaars, their desire for the metal has not declined. India estimates that the effect on their currency from the sale of illegal gold has hurt their Rupee’s value by about 10% in the past year alone. This type of impact is hardly petty, and can severely cost the Indian infrastructure a lot over time. Other countries are getting wealthy off of the hard work of the Indian people, and the government is unable to collect a duty fee on this smuggled gold to help offset it.
Featured image from Bullion Street.
Gold Smuggling Takes Toll On Indian Economy.