The trend of air passengers carrying gold into the country is increasing. Almost 54 tonnes of gold, with a market price of around Tk 450 billion, was brought into the country through the two airports in Dhaka and Chattogram in 2022. The amount of gold brought into the country has increased by 53 per cent in 2022 as compared to the previous year.
The air passengers have brought this gold legally, following the Passenger (non-tourist) Baggage Rules. However, the rise in bringing gold is affecting the inflow of foreign currency. People concerned say if the passengers brought in foreign currency instead of gold, then it could have been added to our banking system which could play an important role amid the ongoing crisis of foreign reserves.
There are also questions as to whether the country has the demand of such a massive amount of gold or not. According to the Gold Policy (2018), the yearly demand of gold in the country fluctuates between 18 tonnes to 36 tonnes. As per the figures of Bangladesh Jewellers Association (Bajus), the country needs 18 tonnes to 20 tonnes of new gold a year.
Asked where the remaining of the gold goes, Bajus vice-president Anwar Hossain told Prothom Alo, “Most of the remaining gold is smuggled out. The amount of gold brought in by air passengers is abnormal as the demand is much lower than that.
The information regarding the amount of gold brought in to the country was available at the Hazrat Shahjalal International Airport in Dhaka and Shah Amanat International Airport in Chattogram.
There is no such account at the Sylhet Osmani International Airport. However, analysing the information of the last six months, it was found that the amount of gold brought through the Osmani International Airport is not that much.
How is the gold brought in?
The Passenger (non-tourist) Baggage Rules state that a passenger can carry 234 grams or 20 bhoris of gold while returning from abroad by paying a tariff duty of Tk 2,000 per bhori. Usually, two bars of gold weigh nearly 234 grams.
The passengers can carry up to 100 grams of gold without paying any duty. The customs does not enlist this gold in their document. The 54 tonnes of gold, which was brought to the country in 2022, excluded the gold brought in by the passengers without paying the customs duty.
According to Kitco, a website that provides information on prices of precious metal the price of gold is around US$ 2,000 per ounce. As such, the price of per bhori gold stands at Tk 79,000. With the tariff of Tk 2,000 for per bhori gold, the price stands at nearly Tk 81,000.
The price of 22-carret gold is Tk 98,444 per bhori at the moment in local market. In the local markets of Kolkata, the price of 24-carret gold is 71,150 rupees per bhori, which is around 92,000 in BDT.
Speaking to the customs officials and passengers at the two international airports in Dhaka and Chattogram, it has been learnt that most of the gold that the passenger carry come from the United Arab Emirates. While some passengers carry gold for their own purposes, some are paid by the gold smugglers to carry two bars of gold legally. The smugglers collect the gold bars from the passengers at the airport after they pay the customs duty. The passengers usually become interested in the deal as they see this as a scope of an extra income without any risk.
Why carrying gold by air is on the rise?
Analysing the data of the two airports, it has been revealed that the trend of carrying gold on airways has increased since the government reduced the customs duty by Tk 1000 in the 2019-20 fiscal.
According to the figures of the two airports, the amount of gold brought by the air passengers was five and a half tonnes in 2020, 35 tonnes in 2021 and 54 tonnes in 2022. Notably, 54 tonnes of gold means 4.6 million bhoris of gold.
However, the passengers travelled less amid the restrictions due to the pandemic in 2020. A total of 23,674 passengers carried gold that year, while 151,917 passengers carried gold in 2021. The number of passengers carrying gold was around 232,000 in 2022.
The gold reserve of Bangladesh Bank stands at 14 tonnes at the moment. This means the amount of gold brought in by the air passengers is thrice the gold reserve of the Bangladesh Bank.
In a report on Indian gold market in 2017, the World Gold Council said gold smuggling in India increased after the country took initiatives to control gold import. Around 100 tonnes of gold is smuggled into India every year on mainly from Bangladesh, Myanmar and China, the report said.
The report in 2021 also mentioned these countries as the source of the gold smuggled into India
Insignificant amount of institutional import
Bangladesh also imports gold officially. The Bangladesh Bank has issued license to some 19 agencies as gold dealers. However, the amount of gold that these agencies import is quite low.
According to the National Board of Revenue (NBR), seven of the licenced gold importing agencies imported a total of 139.46 kg of gold bars at a cost of US$ 8.2 million so far after getting the license. Some 12 of these agencies didn’t import gold despite having license. These agencies imported a total of 24 kg gold in 2022, which was 93 kg the previous year.
People concerned say the main reason behind the low import of gold institutionally is the high tariff duty. Where the air passengers can bring gold by paying a customs duty of Tk 2,000 per bhori, the traders have to pay Tk 5,000 as duty for the same amount.
Mostafizur Rahman, a special fellow at the Centre for Policy Dialogue (CPD), a private research organisation, thinks that this issue needs to be investigated as the import of gold bars is more than the demand.
Speaking to Prothom Alo, he said, “Gold is being smuggled to the country as the traders get a good price here. Gold smuggling also increases when the price is high in the neighbouring countries.”
“The customs duty can be adjusted in compliance with the rate in the neighbouring countries to prevent gold smuggling. Besides, the amount of gold that the passengers are allowed to carry can be lessened. It will reduce the tendency gold smuggling, but the expatriate will still have the chance to carry gold,” Mostafizur Rahman added.
He said these initiatives could help raise the inflow of foreign currency.