Government agencies have started to make physical checks of gold stocks held by wholesalers to ensure inventories match the amount imported by banks and state-run traders, an industry association said, as the country steps up efforts to halt smuggling.
The move could aggravate shortages in the physical market as authorities seize gold without a valid provenance, boosting premiums, which rallied to a record of $160 an ounce on London prices late last year.
"Government agencies are raiding and seizing gold at various places and asking to reconcile the (gold bar) number with the imported gold,” India Bullion and Jewellers Association (IBJA) general secretary Surendra Mehta said.
Gold was being seized if numbers do not match up, said Mehta. Officials from Customs department were not immediately available to comment.
Imports have fallen sharply, leading to shortages and triggering smuggling.
Deccan Herald is on WhatsApp Channels| Join now for Breaking News & Editor's Picks