Frequent seizures of contraband gold and the arrest of people involved in the racket prove that Nepal has now become a transit route for gold smuggling to neighboring India.
Nepali police on Sunday confiscated 54 tola of gold (85.73 tola makes one kilogram) from five Nepali smugglers, including three women. The gold was on its way to India.
Acting on tips that three women were bringing gold to Nepal from China in a bus, a police team was deployed to seize the precious metal in Bhaktapur, around 15 km east from this capital city.
Deputy Superintendent of Police (DSP) Ramesh Thapa said the gold being smuggled was in the form of thick necklaces which the three women smugglers had been wearing.
"This recent crackdown on gold smuggling has brought to light a new modus operandi where smugglers mould gold into pieces of jewelry and make women wear them so that they cannot be detected," Thapa told Xinhua.
On Jan. 18, an Indian national was arrested with two and half kilograms of gold at the Tribhuvan International Airport (TIA), Nepal's only international airport.
Bikram Kumar Bisandar Chaitramani, who had flown from Dubai on a Fly Dubai flight, was arrested with the precious yellow metal concealed in his shoe.
Nepali daily newspapers almost carry each day a report of gold being smuggled. Police, of late, have been successful in scanning concealed gold materials but a large volume is still believed to have slipped from the scrutiny of the authorities.
Police authorities have a suspicion that Nepal, being a crossroad, is now turning into an ideal hub for gold smuggling. The police crackdown so far shows that gold is being transported to India through smuggling mainly from Hong Kong, Singapore, Switzerland and Dubai.
Nepal Police statistics show that a total of 105 kilograms of gold had been confiscated from the smugglers during the last 17 months while a total of 69 kilograms of smuggled gold was seized in Nepal in the last six months of the current fiscal year. "This statistics show only the smuggled gold which have been seized but not those that have slipped which could be triple in volume," a high ranking police officer, who requested anonymity, said.
The officer said that the current internal squabble among politicians in Nepal that apparently affected the morale of the intelligence and security units could have emboldened the gold smugglers to step up their modus operandi.
"The gold being smuggled is meant for Indian market where there is soaring demand for it," the Kathmandu- based daily newspaper Kantipur quoted Nepal Police Spokesperson Ganesh KC as saying.
Anand Raj Dhakal, deputy director general at Nepal's Department of Revenue Investigation, confirmed the report.
"There is a growing demand for gold in India. So the smugglers are cashing in on that," he told Xinhua.
"In the sale of one kilogram of smuggled gold, the Indian traders directly get 850 U.S. dollars' extra profit," Mani Ratna Shakya, chairman of Federation of Nepal Gold and Silver Dealers' Association, said.
"Without customs and other charges, traders in India could easily get additional 6,000 U.S. dollars profit in the sale of 1 kilogram of gold."
Shakya blamed weak security system, especially at the TIA and boarder points adjoining India, for the rise of gold smuggling in this landlocked Himalayan nation.
He also said that Nepali traders use very nominal (around 10 percent) of the smuggled gold for local market especially during the marriage season.
Winter is considered as a marriage season in Nepal. The government of Nepal has imposed strict quota system in the importation of gold in the local market.
Nepali traders can sell only 20 kilograms of gold a day. However, stakeholders believe the market consumes around 35 kilograms a day. "Wherever the smuggled gold is traded and consumed, the government should be serious to curb this illegal activity," added Shakya.