Published On : Mon, Apr 24th, 2017

Mumbai: How gold smugglers changed mode of operation post demonetisation


Representational Pic

: Prime Minister Narendra Modi’s surprise move to scrap larger denomination banknotes on November 8, 2016 forced smugglers to change their modus operandi in cash-based gold smuggling.

The market was dry after demonetisation as there was no free flow of cash. But gold-smuggling did not stop as it has a high profit margin.

In a bid to heighten their intelligence network and keep record of smugglers (and those who frequently fly), customs officials have created an application with the help of officials in immigration department at airport.


After demonetisation officials of the Intelligence Bureau (IB) and Research and Analysis Wing (RAW) have been assisting customs officials who intercept the smugglers carrying the yellow-metal through the air route from different countries.

Smugglers prefer Dongri hotels
Intelligence sources from Delhi have revealed that the role of Dawood-company cannot be ruled out as the most of the carriers, intercepted at Mumbai’s international airport, have revealed during interrogation that they were about to deliver the consignment at Dongri – the place where dreaded gangster spent his childhood.

The smugglers who give the slip to customs officials at Mumbai international airport are taken to hotels in Dongri area of South Mumbai to collect the smuggled items.

Once the consignment arrives at CSIA, the carriers are taken to the hotel (available at cheaper rate) to recover the smuggled items. These carriers are basically low-income workers returning home mostly from Gulf countries. They receive carrier fees as well as sponsored air ticket to carry gold, currency etc.

Customs officials have requested Mumbai police to help them nab and expose the smuggling racket. But no positive result, post demonetisation, has yielded so far.

Intensified search at CSIA
Post-demonetisation, customs officials deployed at Chhatrapati Shivaji International Airport (CSIA), Mumbai intensified the search of passengers especially those who avoid red channels where the passengers declare their dutiable goods. Kingpins behind smuggling business started using foreign nationals and women as “carriers” to avoid being easily detected.

Since January 2017, it is observed that there is a rise in gold and currency smuggling in various forms through air routes by passengers by way of concealment. Earlier, demonetisation of high denomination currency put a check on gold smuggling for a few months.

“Post-demonetisation, the gold smugglers are back in the market seeing the profit margin going up every single day,” said Pradnyasheel Jumle, Deputy Commissioner, Air Intelligence Unit (AIU), Mumbai.

“Earlier they were bringing gold bars concealed in their handbags. But post-demonetisation the smugglers resorted to make deep concealment of gold in various electronic items including microwave, mixer grinder, juicer, hair straightener and other household items of daily use,” said Jumle.

Deep concealment factory in Dubai
In foreign countries, the smugglers have established a factory to make deep concealment of yellow metal in the interior electrical mechanism of electronic items.

“During investigation we found that there is a shop in Dubai where the smugglers get concealment on demand and the smugglers have to pay extra for it,” said Jumle, adding, “The profit margin is thin in deep concealment of gold in electronic items.”

Sometimes, the gold is concealed in electronic items in such a synchronised way that the customs officials, too, get confused. It is really very hard for custom officials to detect. They have to break the electronic items to check if the gold is concealed in its interior mechanism. “On the basis of suspicion, we break the electronic item. Sometimes we have to refund the damage to passenger if the gold is not found inside the electronic items they are carrying,” said Jumle.

Where the seized gold goes
Once the gold is seized, the officer deposits the goods fully packed and in sealed condition at the main warehouse within 48 hours of seizure with a forwarding memo and the photocopy of panchanama.

The Superintendent of Customs in-charge of Warehouse/Strong Room receives the seized goods and makes entries in the register’s maintained by the section.

The main warehouse is a highly secured area guarded by CISF, and the warehouse/ strong room is under the overall supervision of Superintendent of Customs.

After the final proceedings laid down as per the Customs act, 1962 the seized goods are either disposed of or released.

He added that it was not easy to detect as many passengers do not co-operate them in searching the luggage. “Sometimes we have to convince them hard to cooperate with us in the search as we are here at frontier and it is our job to restrict anything that affects the Indian economy and the health of general public,” said Jumle.

The presence of customs officials at departure point at airport is very weak due to a shortage of staff. Due to insufficient manpower, the customs officials have been focussing more on arrival point, especially at international airports.