KOCHI: Caught by surprise over the Centre’s sudden move to demonetise Rs 500 and Rs 1000 currency notes, the Customs and Directorate of Revenue Intelligence foresee a spurt in smuggling of gold into the state, as bullion dealers expect the demand for gold jewellery to increase for the coming months due to the move. Following this, the officials are keeping a close watch on all developments.
A senior DRI official said it was almost certain that black money hoarders would invest in gold to avoid losing the money, while allowing them to encash the yellow metal whenever they want.
“The Centre’s announcement took us by surprise. We are closely watching all developments,” the official added.
Customs officials said gold flow into the state had received a momentum of late, after seeing a considerable dip in gold seizure cases in this fiscal’s beginning.
“Moreover, smugglers seem to have taken different routes to bring the contraband into the state. Now, with demonetisation of Rs 500 and Rs 1,000 notes and subsequent increase in jewellery trade, illegal gold flow into the state would be strengthened in all likelihood,” they felt. Industry experts, however, differed, saying they were anticipating more restrictions in bullion trade by the government in the coming months similar to its demonetisation policy. Hence, they feel, traders would avoid taking high risks, choosing to tread a cautious path instead.
“A slash in import duty in the next budget in accordance with new GST tax regime also seems likely. Once it happens, smuggling activities will cease. Nevertheless, it is almost certain that black money hoarders will try to save their illegal wealth by investing in easy investments like gold to avoid any loss,” they said.
