The fashion show held by the Gem and Jewellery Export Promotion Council at the Oberoi on Monday.

MUMBAI, June 23: It is a gold rush, the likes of which has never been seen before. Thanks to the liberalised import policy several hundred kilograms of gold is being brought in every day by Indians returning home after short stays abroad.

Over 350 kgs of the yellow metal comes in through the Mumbai airport daily accounting for nearly half of the total import by India. The trend started in January last when Indians with more than six months' stay abroad were permitted to bring in up to 10 kgs of gold each, up from 5 kgs earlier. As a result customs officials at airports across the country are counting their riches in gold. Legal channels have proved to be a better option to smuggling. ``Smugglers who dumped gold in some deserted beach now send it through couriers who return home after a long stay,'' a senior customs official told Express Newsline. It is a loophole deliberately created by the government to mop up maximum revenue. ``Sending gold via couriers is not illegal since all conditions of the law are fulfilled,'' the official pointed out.

Gold importers pay a nominal duty of 5 per cent of the gold's value which works out to Rs 220 per ten grams. Customs statistics reveal that the carrot and stick policy is putting more money into the government's coffers than ever before. Between January and April 1997 alone, Mumbai Customs mopped up Rs 139.18 crore while the take for the years 1994 and 1995 amounted to only Rs 68.93 crore and Rs 194.21 crore respectively with gold accounting for 80 per cent of the collection.

Since smugglers run the risk of having the consignment seized many play by the book. While seizures effected by customs amounted to Rs 18.52 crore in 1995, it fell to Rs 10.55 crore the following year. However, seizures between January and April 1997 fell sharply to Rs 1.44 crore.

Import liberalisation has increased the demand for gold in the country according to World Gold Council (WGC) statistics. Demand for gold in the first quarter of this year was 162 tonnes, a 38 per cent increase over the corresponding period of 1996. Indians, who are the biggest hoarders of gold in the world, have stashed away between 8000 and 11000 tonnes of gold, said the WGC. Only the bullion hungry non-resident Indians come second to their gold hunting cousins back home. Over 45 per cent of the gold sold in the retail markets in the Gulf countries are bought by expatriate Indians. ``The Gulf states are all conduits, to varying extents, for the re-export of (gold) bars to India. Dubai, known as the `city of gold' imported more than 350 tonnes of god bars during 1996, and re-exported nearly 85 per cent of that to India, Pakistan and Iran,'' says a WGC report.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.