Eighty passengers on a flight last week from Dubai to Calicut, India, were each found carrying 2.2 pounds of gold, up to 176 pounds total.

Almost Every Passenger on a Flight from Dubai to India Was Caught Carrying 2.2 lbs. of Gold

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But despite what sounds like a healthy-sized smuggling operation, it was all done legally.

Indian lawmakers have recently placed curbs on gold imports, but there’s a law that allows non-resident Indians (NRI) to bring gold into the country after they pay a duty, the Times of India noted. Further, any NRI that stays abroad for more than six months is allowed to bring in approximately 2.2 pounds of gold.

Gold houses and smugglers are capitalizing on cheaper gold from countries that have been affected by fluctuating international prices by having NRIs bring the stuff over on planes.

“It’s not illegal. But the 80kg that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” an official told the Times of India.

The official said the passengers were mostly laborers from Dubai, adding that the people who set up the gold drop would have otherwise resorted to illegal means to get the precious metal into India.

“We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.

This most recent development appears to be just the tip of the iceberg. According to the report, passengers from Dubai have brought in approximately 2,204 pounds of gold in the last three weeks.

Most of the imported gold goes directly to jewelry makers in Tamil Nadu and Andhra Pradesh, goldmakers said in the report.

Officials familiar with the situation said it makes perfect sense for gold houses and smugglers to use passengers from Dubai.

“There is always a steady stream of Indian labourers from the Gulf visiting Kerala, and they form an attractive target for these dealers. Since there is no risk involved, and some incentives thrown in, many of them are eager to carry someone else’s gold,” said an official.

But perhaps we shouldn’t be surprised by this latest development in India’s ongoing love affair with the precious metal. Indeed, as previously reported on TheBlaze, India has made great strides in positioning itself as one of the world’s top holders of gold.

In fact, according to the World Gold Council, India is now the world’s largest consumer of gold, holding a full 20 percent share of global demand.

“Import duty on gold in India has increased from 2 percent to 15 percent between January 2012 and September 2013. Moreover, the Reserve Bank of India in June ruled out any credit transaction for imports, unless they were intended to make jewellery for export. This has reduced import of gold, forcing gold merchants to depend on smuggled gold,” an official told the Times of India.

Simply put, attempts by India’s government to control to flow of gold so as to control the current account deficit have proved futile. The country craves and demands the precious metal.

The Reserve Bank of India “tried to discourage gold purchases because it doesn’t have the utility of other commodities like oil or copper. It mostly sits there in lockers. But when the gold imports through proper channels have come down, merchants have started depending on illegal channels to meet the demand from consumers,” an official told the Times of India.

(H/T: Zero Hedge)

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There was an error in the original version of this story that claimed 13 passengers were holding gold. This post has been updated.