India gold smuggling slowed by election seizures of cash, bullion

India is world’s second-biggest buyer of the precious metal, and gold smuggling surged after the government raised the import duty to 10 percent in August 2013. (AFP)
Updated 15 April 2019
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India gold smuggling slowed by election seizures of cash, bullion

  • In India, political parties and their supporters often offer money or goods in exchange for votes
  • One of the biggest gold seizures since the current election was announced on March 10

MUMBAI: India’s gold smugglers have slowed their operations over worries their shipments will be caught up in seizures of cash, bullion, booze and drugs that are aimed at controlling vote-buying in the country’s national elections, industry officials told Reuters.
In India, political parties and their supporters often offer money or goods in exchange for votes. The Election Commission, which monitors the polls, tries to prevent this by setting up highway checkpoints to seize cash, gold, liquor and other high-value items that candidates avoid mentioning in their expenses due to a cap on the amount they can spend.
Last month in Mumbai, in one of the biggest seizures since the current election was announced on March 10, the Directorate of Revenue Intelligence seized 107 kg of gold, worth about 300 million rupees ($4.3 million).
The slowdown in smuggling has boosted gold imports at banks in the world’s second-biggest buyer of the precious metal, allowing them to charge a premium over global prices.
“After a big seizure in Mumbai, smuggling has gone down drastically. Grey market operators don’t want to take the risk during the election period,” Anantha Padmanabhan, chairman of All India Gem and Jewellery Domestic Council (GJC) said.
India’s Election Commission as of April 14 has seized $365 million in cash, liquor, gold, drugs and other goods over the last month, more than double the $172 million confiscated in the last election cycle in 2014.
The random checking of vehicles and seizures have made it nearly impossible for smugglers and other “grey market” operators to move cash and gold from one place to another, said the head of the bullion division at a Mumbai-based private bank.
“This is helping banks. Our gold business has improved in the last few weeks,” he said.
Gold smuggling surged in India after the government raised the import duty to 10 percent in August 2013. Grey market operators — businesses that smuggle gold from overseas and sell it in cash to avoid the duties — got a further boost in 2017 when India imposed a 3 percent sales tax on bullion.
The grey market operators can sell gold at discounts to prevailing market prices as they evade paying the 13 percent tax, said Harshad Ajmera, a gold wholesaler in Kolkata.
But this week, even in the cash market, gold was sold at the market price, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
Dealers were charging a premium of up to $2.50 an ounce over official domestic prices, the highest in nearly five months.
Up to 95 tons of gold was smuggled into India in 2018, according to the World Gold Council, although India’s Association of Gold Refineries and Mints and other industry bodies put the figure at more than twice that.
Election Commission rules makes it mandatory for people to show valid documentation if they are carrying more than 50,000 rupees ($722) in cash, or else it could be seized. This rule has been hurting the jewelry industry, especially in rural areas where more than half of gold is bought in cash.
The limit of 50,000 rupees is “too low for the jewelry industry” as even a small 20-gram (0.7-ounce) gold chain costs more than that, said Padmanabhan of GJC.
“Demand has fallen due to the cash restrictions. We have requested that the Election Commission raise the limit.”


UN: Pro-government forces kill more Afghans than insurgents

Updated 28 min 38 sec ago
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UN: Pro-government forces kill more Afghans than insurgents

  • The report says 1,773 civilians were hurt or died in the first three months
  • This is a significant drop from the same period last year when 2,305 civilians were killed or wounded

KABUL, Afghanistan: Afghan and international forces had killed more civilians than insurgents in the first three months of the year, the UN announced Wednesday, the first time the deaths caused by the government and its allies exceeded their enemies.
Still it was insurgents who were responsible for the majority of dead and wounded civilians combined, according to the UN Assistance Mission in Afghanistan’s report, which was released in Kabul.
The report said 1,773 civilians were hurt or died in the first three months, which is a significant drop from the same period last year when 2,305 civilians were killed or wounded. Last year, many brutal suicide bombings were blamed for the high casualties.
Between Jan. 1 and March 31, the report said 581 civilians were killed and 1,192 were hurt. While insurgents caused a significant majority of the injuries, it was pro-government forces, including NATO, whch killed the majority of civilians. They were responsible for 305 civilian deaths, nearly half of them in airstrikes. The other heavy death toll took place during searches, according to the report.
At the same time, the government and international forces injured 303 civilians, compared to insurgent attacks that injured 736, the report said.
It’s the first time since 2009, when the UN began compiling statistics on civilian casualties, that the deaths as a result of actions by the government and its allies exceeded their enemies.
Most of the deaths were the result of aerial attacks, which were most often carried out by international forces. While the report does not identify the United States, it is the US that carries out airstrikes when called in to assist Afghan forces. It also follows a trend reported in last year’s UN annual report on civilian casualties, which showed a dramatic hike in civilian deaths by pro-government forces including more than 1,000 civilian casualties from airstrikes, the highest since the UN began keeping track 10 years ago.
In September last year, Masih Rahman’s entire family of 11 __ his wife, four daughters, three sons and four nephews __ were killed when a bomb flattened their home in Mullah Hafiz village in the Jaghatu district of Afghanistan’s central Maidan Wardak province.
“It’s not just my family, there are dozens of families just like mine who have been lost in bombings,” he said in an interview on Tuesday.
Rahman was working in Iran when he was told his entire family had been killed in an airstrike on his village, which is controlled by the Taliban. Rahman has sought redress from the United Nations. He has taken his case to Afghanistan’s Independent Human Rights Commission, which put out its own report on civilian casualties on Tuesday.
In that report, the commission said 11,212 civilians were hurt or wounded between March 31, 2018, and March 31 this year. In just the last 10 years of Afghanistan’s 17-year war, the commission said 75,316 Afghan civilians had died.
“A shocking number of civilians continue to be killed and maimed each day,” said Tadamichi Yamamoto, the UN secretary-general’s special representative for Afghanistan.
He said that anti-government elements need to stop deliberately targeting civilians and using improvised bombs, which cause indiscriminate harm, while pro-government forces are called upon “to take immediate measures to mitigate the rising death toll and suffering caused by airstrikes and search operations.”