Manipur-Myanmar and Siliguri Corridor are becoming important trade routes

India seized 4,869.6 kg of smuggled gold in the financial year 2024 (FY24) as smugglers exploited porous borders and rising domestic demand. Unpleasant the Directorate of Revenue Intelligence (DRI).

Despite reducing customs duty on gold from 15 percent to 6 percent in the 2024 budget, smuggling remains rampant due to a mismatch between supply and demand. More than 90 percent of India’s annual gold consumption is import-dependent, driven by cultural traditions and investment needs.

The DRI’s latest Smuggling in India 2023-24 report highlights Myanmar as a major source and transit center for illicit gold. Smuggling syndicates exploit established corridors, such as Tamu-Moreh in Manipur and Zokhawthar in Mizoram, using challenging terrain and limited border controls. Transit hubs in Myanmar, including Muse, Ruili and Mandalay, play a crucial role before gold enters India.

“Manipur and Mizoram have become critical hotspots for gold trade, as evidenced by frequent seizures,” the report said, adding that surveillance along these routes has been intensified. Highlighting the ongoing challenge, Finance Minister Sanjay Malhotra said that even with reduced customs duties, “Gold smuggling still remains a threat.”

In FY24, the Central Board of Indirect Taxes and Customs registered 6,425 smuggling cases, underscoring the magnitude of the problem. Outside the northeast, smuggling syndicates also use Nepal’s road and rail network to transport gold to major Indian cities. The Siliguri Corridor in West Bengal remains a chokepoint for gold entering mainland India.

Smugglers use increasingly sophisticated techniques to evade detection. Gold is hidden in machine parts, alloyed with other metals or hidden in modified vehicles with secret compartments. Air freight and courier routes are also emerging as important smuggling channels.

Syndicates operate on a ‘hub and spoke’ model, distributing smuggled gold from central hubs to different regions. Once in India, the gold is often re-melted and made into jewelry, erasing its illicit origins and integrating it into the formal market.

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