Gold Smuggling Surges in India Ahead of Dhanteras and Diwali 2025 as Prices Hit Record Highs

Gold smuggling into India has increased in recent weeks as domestic prices hit record highs and festival demand surges. Despite lower import duties, authorities report multiple interceptions at airports, as per Reuters report.

Tight supply, soaring premiums, and strong festival buying are driving both legal and illegal gold markets to unprecedented levels.

Spike in Gold Smuggling Despite Lower Import Duties

Although the government reduced gold import duties from 15% to 6% last year, smuggling activity is climbing ahead of Dhanteras and Diwali. Customs and the Directorate of Revenue Intelligence (DRI) officials confirmed that several smuggling attempts have been foiled at major airports, the report added.

Record Domestic Prices and Margins for Smugglers

Gold prices in India reached ₹128,395 per 10 grams, a 67% increase since the start of the year. At these levels, smuggling a kilogram can generate margins exceeding ₹1.15 million, bypassing the 6% import duty and 3% local sales tax.

Prior to the July import duty cut, margins were around ₹630,000 per kilogram. Rising prices are making smuggling increasingly lucrative for grey market operators.

Supply Shortages and Premiums

Banks are reportedly unable to meet the spike in demand, charging high premiums on available gold stock.

Some dealers in Kolkata reported premiums of up to $25 per ounce above official domestic prices, the highest in over a decade. Investors are driving demand, while physical shortages exacerbate price pressures.

Read More: Dhanteras 2025 Gold Rate Today: Check Gold Prices in Your City on Oct 17 – Kolkata, Chennai, Mumbai.

Conclusion

Surging gold prices and festival demand are driving increased smuggling activity in India, posing challenges for authorities and heightening market pressures. Buyers and regulators alike are navigating a market characterised by tight supply, high premiums, and historic demand peaks.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.