Gold smuggling can end only when prices in India are pegged to international rates: Atlas Ramachandran

Dubai: Gold smuggling never completely ceased in India and it will end only if the prices in the country are ascertained by rates prevailing in international markets, according to Atlas Ramachandran, who was once a colourful presence in the jewellery business.

It was in the 1970s that gold smuggling to India from Singapore and the UAE became widespread. It became rampant under underworld don Haji Mastan, who made Mumbai the hub of his smuggling activities.

Later, many Malayalees also came into the scene, he said.

In the UAE, only value-added tax (VAT) is imposed on gold. But this is not applicable on gold bullion (gold bars); VAT has to be paid only for gold ornaments. But, in India, you have to pay an import duty of 10 per cent.

If a kilo of gold is purchased from the UAE, then it would cost about Rs 43 lakh going by the current rates. The price becomes Rs 49 lakh when it lands in India.

So, if that can be brought to India without the knowledge of the Customs department — in other words, if it is smuggled into India — then the profit on a kg of gold is Rs 7 lakh.

Those sending gold from the UAE and those receiving and buying it there are all part of smuggling rackets, he said.

In India, gold is required only to make jewellery, Ramachandran, who has about 40 years of experience in the industry, said.

Ramachandran had gone to Kuwait in 1974, where he worked in a bank. He started Atlas Jewellery in 1981. He later expanded the business to the UAE and settled down in Dubai.

He said he does not understand what prevents prices in India from being pegged to the international rates, which could put an end to the smuggling of gold from the UAE. Some say if that is done, then India will lose tax revenue and that it will not be able to pay salaries to government officials, he said.

He said he cannot say if politicians are involved in the smuggling of gold through diplomatic baggage that was exposed at the Trivandrum International Airport recently.

The Customs officials at the airport found 30 kg of gold worth about Rs 14.8 crore in a diplomatic baggage addressed to an official in the UAE Consulate in Thiruvananthapuram.

Two former employees of the consulate — Swapna Suresh and P S Sarith Kumar — are suspected to be behind the smuggling operations. While Swapna is on the run, Sarith has been arrested.

In an audio clip purported to be of Swapna that aired by some TV channels, she has said that she had no role in the racket. She said she was being framed in the case and that she had contacted the Customs department only to find out why the baggage was being held up by officials.