Pakistan's gold import ban may block smuggling routes to India

NEW DELHI (Scrap Monster) : The Pakistan's Economic Coordination Committee (ECC) of Cabinet announced a temporary ban on gold imports by the country for a period of one month on the back of surging import volumes and rising acts of smuggling to neighboring India.

In Pakistan, gold could be imported duty-free. The ECC observed that most of the imported gold was being smuggled across the border to India. According to statistics released by the Pakistan Bureau of Statistics, gold imports by Pakistan surged by 102% during 2012-13. As many as 6,745 kilo of gold worth $346.255 million was imported in 2012-13, as compared to the import of 3,267 kg valued at $171.674 million during 2011-12.

Gold imports by Pakistan in June 2013 stood at $40.252 million against imports of $14.575 million in June 2012. The value of gold imports in June recorded a jump of 176.17% compared to imports during June 2012.

The gold imports by the country during the period of initial six months of the year amounted to Rs.92.97 billion, which has sky rocketed by almost 400%. The gold imports during the corresponding six-month period in 2012 were only Rs.19.13 billion.

India had recently imposed tight controls on gold imports in a bid to curb the country’s mounting fiscal debt worries. According to ECC, the seizure of smuggled gold has increased by nearly 365% in April-June 2013 in India, as compared to the same period of 2012. The ECC decision on gold import ban, which has come effective July 31^st onwards, is likely to put breaks on the acts of gold smuggling across the border.