Mint Quick Edit | Ranya Rao arrest: Let gold enter India duty-free
Summary
- India’s import duty on gold was cut to 6% last year but smuggling seems to persist. In this season of tariff rejig plans, maybe we should allow this much sought-after precious metal in freely.
Kannada actor Ranya Rao hit the news after being arrested for alleged gold smuggling at Bengaluru airport on Monday. She was reportedly trying to sneak in 14.8kg of the precious metal from Dubai.
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With gold prices having skyrocketed amid global uncertainty, its glitter has caught the fancy of investors globally. But does the financial incentive to smuggle it into India remain too high? Last July, its import duty was slashed from 15% to 6%, reducing the domestic premium on its price that sometimes leads people to covet the difference. That cut was expected to deter smugglers. The practice, however, continues.
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Only two weeks ago, the Border Security Force foiled attempts to smuggle 25 gold biscuits into India. A lower tariff means it takes larger volumes smuggled to cover the costs of this illicit undertaking. The risk of getting caught must also be weighed against the profit potential. Yet, it goes on.
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Before the budget, hopes had arisen of the duty on gold being halved. However, no cut was made. In this season of tariff rejig plans, it may be a good idea to consider letting gold enter duty-free. As for the impact on customs collections, it’s best not to see duties as a revenue source.
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