Centre eyes tighter customs rules to curb smuggling by ‘import carriers'

Mint

3 days ago

New Delhi: The central government is working on a strategy to dismantle a sophisticated, illicit network of so-called 'import carriers' at India's bustling airports and seaports, according to two people aware of the matter who spoke on the condition of anonymity.
Import carriers–who may masquerade as regular Indian tourists going abroad, some may even have special privileges–smuggle in goods beyond permissible limits or which may be banned in the country. They bring in items like gold, toys, electronics and the like from overseas, bypassing customs checks, and pass the goods on to other entities in the country for commercial use.
To curb this practice, the commerce ministry plans to ask the finance ministry to direct the CBIC (Central Board of Indirect Taxes and Customs) to update baggage rules in the Customs Act, without causing any inconvenience to regular passengers, the people cited above said.
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Current regulations allow Indian residents to bring in goods from overseas worth up to ₹50,000 duty-free, and up to ₹1,00,000 from some West Asian countries, beyond which customs duty applies. Further, under the Customs Act, 1962, passengers must declare dutiable or banned goods and can hand over bags for clearance. Using these rules for commercial imports is illegal, and can lead to confiscation or penalties.
Measures being discussed include making declarations more detailed, placing a cap on how often passengers—especially frequent flyers from trade hubs like Dubai, Hong Kong, and Guangzhou—can avail duty-free allowances annually, and enhancing the existing Atithi app's digital customs declaration system with AI-based profiling and stricter tracking, the persons cited above said.
The Atithi app, launched by the CBIC in November 2019, enables international travellers to electronically file customs declarations for dutiable items and currency in advance, streamlining the customs clearance process upon arrival in India.
'Most of the goods moved through the import carrier network are sourced from trade hubs of China and Dubai, with electronics and gold being the top items particularly on flights originating from Hong Kong, Guangzhou, Shenzhen, and Dubai," said the first person cited above. 'There are also discussions to increase collaboration with airport authorities and customs field formations to flag repeat offenders and prevent this backdoor route from being used for commercial gain."
'We have identified certain products such as electronic items, toys, luxury goods, garments, and gold to be brought under review," said a second person aware of the matter.
Queries sent to the ministries of commerce, finance, and civil aviation remained unanswered till press time.
How the import carrier network works
Let us illustrate how import carriers work with an example. Say, a toy shop owner wants to sell Chinese toys in Delhi, which cannot be legally imported. The shopkeeper would pay a customs handling agent–a private employee–to facilitate the illicit import, who would in turn pay an import carrier (or more) to visit China as a tourist and bring in the toys as part of personal baggage. Once the trip is over, the toys brought in go back through the network and land in the toy seller's shop.
Each such import carrier makes multiple trips, multiplying the volume and value of undeclared goods sneaked into the country.
An industry executive who requested anonymity said that import carriers are so well-trained that they can bring in goods without any checks and have them delivered directly to homes, offices, or warehouses.
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'It is a known fact that the import of toys from China is completely banned, yet Chinese toys can be easily found in many parts of the country," this executive said. 'This is all happening through these import carriers, which is harming our domestic manufacturing ecosystem and causing significant revenue loss."
'There is an immediate need for government intervention to curb such illegal trade practices, which are harming the domestic manufacturing ecosystem and resulting in significant revenue loss to the exchequer," said C.K. Govil, president of The Air Cargo Agents Association of India, while adding that Prime Minister Narendra Modi's focus on domestic manufacturing would gradually diminish such illegal practices.
However, experts are of the view that if India adopts a more liberal trading regime with lower tariffs and fewer restrictions, it could not only reduce the incentive for smuggling but also improve enforcement focus.
'A liberal trading regime with most of the world would put most smugglers out of business," said Rahul Ahluwalia, founder and director of the Foundation for Economic Development (FED), a policy think tank. 'We would also be able to focus enforcement capacity on truly dangerous contraband instead of turning normally traded goods into contraband."
High-profile cases
To be sure, the modus operandi is not only being used by regular folks, but also by celebrities and people with access to diplomatic channels.
One such instance is the case of Kannada actress Ranya Rao, also known as Harshavardini Ranya, who was arrested at Bengaluru airport on 3 March 2025, for allegedly smuggling 14.2 kg of gold from Dubai. According to a report by The Indian Express, she used the US passport of her associate and co-accused, Telugu actor Tarun Raj Konduru (alias Virat Konduru), to bypass Dubai customs checks and move the gold into India.
In another case, Shiv Kumar Prasad, a former personal assistant to Congress MP Shashi Tharoor, was held at Delhi's IGI Airport in May 2024 for allegedly receiving gold worth ₹35.2 lakh from a passenger arriving from Bangkok. He reportedly used his official Aerodrome Entry Permit to facilitate the illegal transfer.
In another case in 2020, Swapna Suresh—a former UAE consulate employee and consultant to the Kerala IT department—was arrested after 30 kg of gold was found in diplomatic baggage.
Exact figures on illegal imports into India are unavailable, but reports reveal significant scale. The Directorate of Revenue Intelligence seized over 1,300 kg of smuggled gold in 2023-24, while industry estimates suggest around 700 kg of gold is smuggled daily, causing annual losses of nearly $10 billion. Electronics and luxury goods are also commonly smuggled, with recent seizures at Mumbai airport worth crores.
India's trade deficit with China surged to a record level in the fiscal year ended 31 March, almost touching the $100 billion-mark. India exported goods worth $14.25 billion to China in 2024-25, and imported $113.45 billion worth of goods. While the exports have dipped 14.4% year-on-year, imports have jumped 11.5%, according to data from the commerce ministry.