COVID led to spurt in gold smuggling

All of us have seen the impact of Covid-19 on people. The virus has not only taken away lives but also livelihoods everywhere. India is no exception. But, has COVID-19 contributed to increased gold smuggling into India? Yes, if one goes by the Directorate of Revenue Intelligence (DRI) which saw a multi-fold increase in the gold smuggling. The trend detected by them suggests that the pandemic has led to a headache to the authorities now.

In a covert intelligence operation undertaken by the DRI on November 19, 2021, code-named "Molten Metal," several Indian and foreign (Chinese, Taiwanese, and South-Korean) nationals suspected to be indulging in smuggling gold into India from China/ Hong Kong, using the air cargo route, were identified. The intelligence indicated that the gold smuggled in the form of machinery parts was being remolded into bar/cylinder shapes before being disposed of in the local market.

Acting on the input, the DRI officers examined an import consignment at Air Cargo Complex, Indira Gandhi International Airport. The consignment was found to contain electroplating machines fitted with transformers. The 'E' and 'I' shaped laminates of the transformers were found to have been replaced with laminates made of gold and coated with nickel, essentially to hide the identity of gold.

Approximately one kg of gold was recovered from each of the 80 imported electroplating machines. In a swift follow-up operation, further recovery of over five kg of foreign-origin gold smuggled into India earlier adopting an identical modus operandi, was made from a Delhi-based jeweler.

Further, during the search operations carried out at several rented premises in Chattarpur and Gurugram, four foreign nationals (two from South Korea and one each from China and Taiwan) were found to be using sophisticated metallurgical techniques to remold the smuggled gold into bar/cylindrical shapes for further disposal. These activities were being conducted by the foreign nationals in rented farmhouses/apartments in plush localities of South Delhi and Gurugram and extreme precautions were being taken by them to keep the illegal nature of their activities hidden even from their immediate neighbors. The recovered gold, totally weighing over 85 kg and valued at approximately Rs 42 crore, was seized. The four foreign nationals involved in the smuggling activities were arrested.

In another intelligence operation conducted by the DRI on May 12, 2022, code named "Golden Tap," it was detected that a syndicate was smuggling gold from Guangzhou, China through the Air Cargo Complex, IGI Airport, New Delhi. The consignments were declared to contain "Triangle Valves" and the smuggled gold was being ingeniously concealed as a small part of the said valves, as depicted in the picture below. The said part though made of gold was coated with nickel to make it look like that of steel. Other three parts were made of steel only. Over 61 kg of gold was recovered from one such consignment of Triangle Valves. The recovered gold was found to be of 99% purity and was valued at Rs 31.2 crore.

Earlier, four courier parcels consigned from UAE to different addresses in New Delhi were intercepted at the New Courier Terminal, New Delhi, on July 16, 2021. These parcels were declared to contain auto and other machinery parts. However, on examination, 13 yellow metal pieces of cylindrical shape, weighing 16.79 kg and valued at Rs 8.07 crore, were recovered. The recovered gold appeared to have been melted and poured into the hollow portions of the machine parts for concealment.

Following the aforesaid seizure of 16.79 kg gold from four courier parcels, two more parcels were intercepted at the New Courier Terminal, New Delhi, on July, 22. These parcels were declared to contain pumps and industrial appliances etc. However, on examination, 6 cylindrical yellow metal pieces, 3 from each parcel, totally weighing 11.236 kg were recovered from the cavities of the industrial appliances.

In this case too, the recovered metal appeared to have been melted and poured into the hollow machine parts for the purpose of concealment. The DRI further seized over 5 kg of gold in Mumbai, which had been smuggled in a courier consignment, adopting identical modus operandi. In yet another detection, over 15 kg of gold was recovered and seized from another courier consignment September of 2021 wherein the back covers of imported wrist watch were found to be made of gold.

The surge in smuggling using the courier route, as illustrated by the above cases, is an emerging trend. This indicates to a switch from the conventional mode of in-person smuggling of gold to courier mode, primarily on account of large-scale disruption in international passenger air traffic owing to the pandemic. Concealment in machine parts is hard to detect, even with sophisticated x-ray equipment. Therefore, efforts will have to continue in the direction of improving the quality of both human intelligence, data analytics and profiling.

The DRI is fully committed to preventing the smuggling of precious metal using this modus operandi and to ensuring that the offenders are swiftly caught and brought to justice. During the pandemic, due to the widespread disruption to air traffic, there was a rise in the instances of gold smuggling by land routes (road or rail).

Much of this smuggled gold originated in Myanmar and was smuggled into India through the old Tamu-Moreh-Imphal trajectory in Manipur, which goes through a vast expanse of unguarded but difficult terrain, and the Zokhatwar route in Mizoram. However, due to the constant and alert vigil maintained by DRI officers, there was a string of spectacular gold seizures in the last three quarters of FY 2020-21.

These include the seizure of 51.33 kg of smuggled gold in November 2020 by the DRI in the north eastern region, seizures of 84 kg, 66 kg and 55.61 kg of smuggled gold in August and November of 2020 and January, 2021 respectively in and around Delhi.

One of the important consequences of the economic devastation caused by the COVID-19 pandemic was the loss of employment, especially in the unorganized and low-wage sectors, the officials say. This led to the loss of livelihoods for a large number of Indian migrants, especially those engaged in low skill jobs in the Gulf countries. With the resumption of air connectivity, a lot of these workers, without any source of income in a foreign land, were desperate to come back home. Their economic and psychological distress was taken advantage of by certain unscrupulous agents, who lured such helpless migrant workers into smuggling small quantities of gold, mostly in paste and powder form, into India, the authorities revealed.