Due to overwhelming gold demand and a government determined to reduce the flow of foreign gold into the country, India is home to more cases—and more bizarre cases—of gold smuggling than virtually anywhere else in the world.
This forces smugglers to use proxies in neighboring countries to attempt to evade the detection of customs authorities.
A popular choice is Sri Lanka, the island nation due just south of the Indian subcontinent. While this connection is hardly a secret, some startling data from Sri Lankan customs offers new insight into the strange tactics that gold smugglers employ in order to circumvent the law.
The incentives for smuggling gold into India are very high. At least, they must be, given the shocking lengths that smugglers are willing to go to.
India's crackdown on gold imports in general is part of a broader strategy to reduce the country's ballooning trade deficit. Gold plays a central role in widening the trade deficit: the high-value precious metal is brought into the country, but very little jewelry or bullion is exported abroad to offset the cost of these imports. Instead, families in India prefer to keep their gold as a means for long-term wealth preservation.
An incredible number of smuggling cases that were stopped by customs agents in Sri Lanka involved people trying to sneak gold and precious stones into India by hiding the valuables in their rectum. In these cases, it appears that the typical compensation for the illicit courier is a mere 25,000 rupees ($385).
While this method is sometimes attributed to inmates of federal prisons (and usually involve drugs, not precious metals), it's still jarring to hear about it happening outside of the confines of the penitentiary system. Why would an otherwise free person go to such lengths?
The practice of hiding contraband in one's anus is apparently a lot more common than one would expect. Similar cases of human "mules" smuggling gold within their bodies typically have involved swallowing the gold. (See image, left.)
Believe it or not, at least one person has been caught with gold hidden up their backside at one particular Sri Lankan airport every week so far this year! It's practically a regular occurrence—and keep in mind that this is just the data from a single airport. Customs officials at Bandaranaike International have already recovered five times the total value of contraband from passengers' rectums in 2017 than all of the previous year. In almost every case, their destination was India.
The English-language news outlet EconomyNext jokingly notes that "the extraction is messy" in these cases. In a recent report from September, one would-be smuggler "was found with his rectum stuffed with seven gold biscuits and six gold chains with a value of 4.5 million rupees," or roughly $70,000 USD.
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Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.