Liquid gold imports soar as savvy buyers spy loophole

For decades, crafty smugglers brought in gold, hidden in body and baggage, evading duties and outwitting customs authorities.

- Srushti Vaidya

For decades, crafty smugglers brought in gold, hidden in body and baggage, evading duties and outwitting customs authorities. Today, some importers are coming in through the front door, legal and duty-free, exploiting a loophole in the system.

Imports of so-called liquid gold have surged since savvy importers discovered a novel method to skip customs duty nearly five years ago, import data showed. After the last budget plugged another tax-evasion route, such shipments have accelerated even more.

Compounds of gold with other elements—also called liquid gold—are used mostly in industrial processes. Importers ship them at zero duty from countries such as the UAE, Japan and Australia that have trade treaties with India, compared with 6% duty on the yellow metal. Once the consignments land in the country, gold is extracted in small refineries.

Imports of such compounds soared 9.25 times over a year earlier and 2.84 times quarter-on-quarter to 69,879kg in the January-March period, shows data from the Directorate General of Commercial Intelligence and Statistics (DCGIS). That's equivalent to $1.29 billion worth of gold imports.

By comparison, actual gold shipments fell 51.2% sequentially and 0.9% over a year earlier to $9.5 billion in Q4FY25.

While higher imports of gold compounds distort the trade data, they also cause a loss to the exchequer.

India imported 111,856 kg of liquid gold from the UAE, Japan, and Australia in FY25.