Gold Demand In India Could Be a Bit Understated: Man Caught With $25,000 Worth of Gold in Rectum

The New India Express has a story this morning that offers some perspective on consumer gold demand in the country. A man was caught at the Chochin airport in Nedumbassery, India with six gold biscuits stuffed up his rectum. Each "biscuit" weighed around 100 grams, making that over 21 ounces of gold-- or over $25,000 worth. The officials discovered the gold after the man was noticed acting nervously, which prompted a physical inspection.

India and China account for more than 70% of global gold demand, but high tariffs on gold imports to India have led to increased smuggling in recent years. Import duties on gold to India is nearly $4 per gram and last year, the Mumbai airport reported that they experienced the highest number of gold seizures in 20 years. The airport in Hyderabad reported that the amount of gold seized in the past year has doubled. According to Kitco, "The value of the gold seized since the start of fiscal year was about $150 million, up from $110 million during the previous period."

In many of the smuggling cases, the smuggler who is caught is often hired by a syndicate.

"Non-declaration, mis-declaration and concealment of imported goods is an offence under the Customs Act, which may result in confiscation, fine, penalty, arrest and prosecution."

Gold in India is commonly used as a ceremonial gift during religious festivals, weddings, and other celebrations and India's gold consumption is so high, that the global price of the metal typically rises as the festival season approaches.

The total amount of black market gold moving into India can't be accurately determined but smugglers are constantly getting caught. Nearly every day there is a new story about gold being found hidden in an airplane toilet for later retrieval and just last week, a father and son were caught in Trichy attempting to smuggle 200 grams in a shampoo bottle.

The increased crackdown on smugglers has of course led to some creative methods for getting the gold into the country. Since we only hear about the smugglers who are caught, we never get to learn the truly effective techniques. Last fall, two smugglers were caught with $52,000 worth of gold foil that had been glued onto the cardboard of toy packages. Who knows how much gold makes it in while hidden in people's rectums?

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