India's Tariff Hikes Fuel a Gold Smuggling Boom

The World Gold Council reports that the formal sector is buckling under the weight of these fiscal changes. While authorities have stepped up seizures at transit points, the sheer scale of the profit margin for illegal operators ensures the flow of gold remains steady. Industry analysts now warn that smuggling volumes could reach a record peak as the incentive to bypass official channels outweighs the risk of enforcement.

This shift undermines the government’s original goal of curbing consumption. Instead of stabilizing the market, the policy has pushed trade into the shadows, complicating efforts to track national bullion reserves. With formal dealers struggling to compete against untaxed imports, the underground trade has become the primary source of supply for a significant portion of the domestic market.