Gold smuggling in India has seen a significant uptick as the nation approaches the festive seasons of Dhanteras and Diwali, occasions traditionally marked by auspicious gold purchases. Government and industry officials report that the surge is driven by record-high gold prices and a supply crunch. Despite a reduction in import taxes from 15% to 6% last year, which initially curbed smuggling, recent weeks have witnessed a resurgence in illegal activities. Customs and Directorate of Revenue Intelligence (DRI) officials have foiled several smuggling attempts at various Indian airports. A Chennai-based bullion dealer noted that the process of bringing gold into India and liquidating it has become quicker and less risky due to strong festival demand and limited supply. Gold prices in India hit a record 128,395 rupees per 10 grams, a 67% increase this year, making smuggling highly lucrative. Grey market operators can earn margins exceeding 1.15 million rupees per kilogram by evading import duties and local sales taxes. A Mumbai-based bullion dealer highlighted the increasing profitability for smugglers as gold prices continue to rise. The situation is exacerbated by banks’ inability to meet full demand, leading to high premiums on available stock. Indian dealers are quoting premiums of up to $25 per ounce over official domestic prices, the highest in over a decade. In the 2024/25 fiscal year, government agencies registered 3,005 cases of gold smuggling and seized 2.6 metric tons of the metal.