India Gold Tariff Hike Fuels Smuggling Revival
India's decision to more than double gold import tariffs to 15% has triggered a resurgence in smuggling that could exceed 100 metric tons this year. Illegal operators are offering discounts of over $200 per ounce, making it difficult for banks and refiners to compete in the legal market.
India gold smuggling could exceed 100 metric tons in 2026 as high import tariffs revive illegal trade. The surge follows a May tariff hike to 15% intended to reduce the trade deficit and support the rupee. Smugglers now offer discounts exceeding $200 per ounce, threatening the margins of legitimate banks and refiners.
### Smuggling Margins Undercut Legal Imports Illegal gold imports are projected to surpass 100 tons this year, according to industry officials and bullion dealers. At current market prices, this volume represents approximately $14.35 billion in value and $2.65 billion in lost tax revenue. Smugglers avoid a combined 18.45% tax burden, including import tariffs and goods and services tax.
