Record 60 kg gold, smuggled from Dubai, seized outside Ahmedabad airport

Mumbai/New Delhi: Gujarat Police on Tuesday said they had made the single biggest seizure of gold smuggled into the country after arresting six people leaving the Ahmedabad airport with 60 kg of the precious metal flown in from Dubai.

The arrest is likely to strengthen pressure on Finance Minister Arun Jaitley to cut the gold import duty from a record-high 10 percent in his budget on Saturday.

India is the world's top buyer of gold, and the high duty has made illegal shipments profitable. The World Gold Council estimates that 175 tonnes of gold were smuggled into the country last year.

"Smuggling is happening because of high customs duty on gold," said Prithviraj Kothari, executive director of the India Bullion & Jewellers' Association, adding that smuggling may rise in 2015 if import duties remain high.

"If we want smuggling to become unattractive, the government should bring down duty to 2-4 percent."

Five men and one woman were arrested outside the airport in Ahmedabad, police said.

Of the six, three had arrived on an Emirates flight from Dubai while the others waited outside the Ahmedabad airport.

Acting on a tip-off, police caught them as they were loading bags containing gold into a car, senior police officer AK Sharma told Reuters.

The gold in the bags was worth nearly Rs. 16 crore, Mr Sharma said.

The suspects told the police that traders pay them up to Rs. 1 lakh for one trip on top of free air tickets, food and hotel costs.

The smugglers risk a jail term of up to seven years, although such a penalty is rare and the main deterrent is confiscation of the gold.

When India first started stifling gold imports in 2013 to tackle a widening trade deficit, smugglers went to the extent of getting human mules to swallow nuggets or hiding gold bars in dead cows.