A salesman arranges gold bangles inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Mumbai, India, May 7, 2019. For some time, business at his store on the outskirts of the Indian financial capital of Mumbai had been sluggish – but not anymore.
Official data showed that gold smuggling has been on the rise in India, with an intricate network of smugglers illegally sneaking the metal into the country via land, sea, and air routes. “Now, with the customs duty getting dropped to the current levels - and when you smuggle there is a cost, it doesn't come for free - I think the arbitrage reduces to a very small level, which wouldn't be incentive enough,” said Jain. Arbitrage refers to the simultaneous purchase and sale of an asset in different markets to achieve a certain profit.