Sunday, June 23, 2024

Jewellery industry glitters on smuggled gold

Nearly 30,000 jewellery shop-owners in the country, including 1500 in the city, are forced to depend on smuggled gold due to cumbersome import procedure and high taxes.
“Our jewellery industry needs 16 to 30 tonnes of gold annually to meet the domestic demand,” said a leader of the Bangladesh Jewellery Samity (BJS). “There is no scope for importing gold because of the hurdles and time-consuming procedures. Besides, high taxes on import encourage gold smuggling,” he also said, adding that if gold is imported through proper channels, price of one bhori of gold ornaments will cost around Tk. 70,000-80,000.
“In the absence of a government policy, most of us depend on smuggled gold as it costs much less,” he told The Independent.
An investigation by The Independent at several jewellery shops located at Tantibazar in Old Dhaka, Bashundhara City, Karnaphuly Shopping complex, Twin Tower, Mouchak Market, Baitul Mukarram, Eastern Plaza and New Market shows that most of the ornaments at the stores are made of smuggled gold.
“About 70-80% ornaments in my shop are made of smuggled gold,” a shopkeeper at Twin Tower Shopping Complex told The Independent.
At the local markets, 22-carat gold ornaments were selling at Tk. 42,050 per bhori, 21-carat gold at Tk. 40,060 and 18-carat gold at Tk. 34,080.
BJS general secretary Dewan Aminul Islam Shahin, however, said, “Gold mainly comes from recycling and expatriates. We get gold from people coming from abroad. Expatriates supply over 10 per cent of the total demand in the country.”
He, however, agreed that the import policy is too cumbersome. “There is no way one can import gold bars directly,” he said.
“We can only import gold through opening letters of credit (LC) and have to pay 58 per cent tax, which is a lengthy and complex procedure. This has pushed the ornaments’ price up and beyond the reach of common people,” he added.
Regarding the huge amount of gold frequently seized at airports, Shahin said the gold that is smuggled in is, in fact, smuggled out to India again. “Indian smugglers use Bangladesh as a channel as the Indian government has recently increased the tax on gold import to 6.5 per cent,” he added.
Over the past 10 months, customs officers seized over 380 kg of gold at Hazrat Shahjalal International Airport. “The government has done nothing for the betterment of the industry. There is no direct import of liquid gold in our country. We sometimes buy gold from the Bangladesh Bank when there is an auction, but it is rarely held,” said Shahin.
“If the government introduces an exchange system to import gold through Bangladesh Bank’s nominated organisations, it would bring the industry under a system. It is a worldwide practice,” he added.
Commenting on the existing import policy, which is over 65 years old, BJS president Dilip Roy said, “It allows us to import gold, but it takes more than 15 days. That makes it difficult to adjust prices as the gold price fluctuates every day.”
“We want a comprehensive gold import policy explaining how we should get gold and at price it should be sold,” he added.
Roy said had the government introduced a separate gold import policy to ensure constant supply, the jewellers would have been able to sell ornaments at the global rate in the local market.
A jeweller at New Market said: “Bangladeshi jewellers make world-class ornaments which can be added to the export basket. Our products are in demand abroad due to their lightness and attractive designs. Our goldsmiths can make ornaments which are very light, compared to the ornaments made in the neighbouring countries. So, we have great opportunities to export gold ornaments.”

-With The Independent input

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