Gold Smuggling Set to Rise, Adani Airport to Become a Hub

Dilip Patel
Ahmedabad, May 16, 2026
The decision to increase the import duty on gold from 6% to 15% has impacted Gujarat—particularly its jewelry, diamond, and trade sectors.
With the hike in the import tax on gold, smuggling activities have surged. Unemployment has also risen. It is estimated that 3 million artisans in Gujarat are engaged in the jewelry trade.

Smuggling—Smuggling activities are poised to increase once again. Historically, lower-priced gold has been smuggled into the region from Dubai, Abu Dhabi, Sharjah, and Bangkok.

Smuggling Set to Rise at Adani Export Hubs
In Ahmedabad, Adani’s Sardar Patel International Airport could once again emerge as a hub for gold smuggling. It is widely believed that the quantity of smuggled gold actually intercepted constitutes no more than 1 percent of the total volume.
Over the three-year period from 2023 to 2025, approximately 180 kg of gold—valued at ₹199 crore—was seized.
In 2024: 126.5 kg
In 2025: 53.6 kg
Thus, during the financial year 2024–25, a total of 135 kg of gold—valued at ₹70 crore—was seized.
By February 2024, approximately 100 kg had been seized.
Gold Smuggling in Gujarat
In the past, whenever the import duty stood at 15%, smuggling activities would invariably escalate.
In 2014, 75.5 kg of gold—valued at ₹23 crore—was seized along the Kutch-Jamnagar maritime route.
In 2017, 52 kg of gold—valued at ₹15 crore—was seized.
In 2019, a smuggling racket worth ₹1,300 crore was busted at Adani’s Mundra Port.
In 2022, 39.4 kg of gold—valued at ₹23 crore—was seized along the Kutch-Jamnagar maritime route. In 2023-24, 70 kg of gold—valued at ₹50 crore—was seized.
In 2024, 93 kg of gold—valued at ₹66 crore—was seized at Ahmedabad and Surat airports. In 2024-25, 74 kg—valued at ₹54 crore—was seized. On average, more than ₹1 crore worth of gold was seized every week. In 2024, following the reduction of the import duty to 6%, official imports increased while illicit imports declined. Now, however, the risk of smuggling at airports and seaports is set to rise once again. Government revenue is expected to increase; in 2021-22, with a 10% duty, revenue stood at ₹35,000 crore. In 2023-24, when the duty was raised to 15%, revenue amounted to ₹17,000 crore. In 2024-25, with the duty set at 6%, revenue is projected to reach ₹26,000 crore. In 2025-26, with a 15% duty, revenue could range from ₹40,000 crore to ₹50,000 crore. Out of this ₹50,000 crore, the Central Government is expected to derive approximately ₹6,000 to ₹7,000 crore in revenue from Gujarat alone.

India is the world’s largest consumer of gold. Every year, between 700 and 900 tonnes of gold are imported into the country.

In the context of Gujarat:
Gujarat’s share of the national gold market is generally estimated to be between 12% and 15%, as Ahmedabad, Surat, and Rajkot serve as major hubs for the gold and jewelry trade within the country.

Gold Consumption in Gujarat:
In 2020, 85–95 tonnes of gold were traded, amounting to a total value of ₹40,000 crore. At that time, the average price for 10 grams of gold was ₹48,000.
In 2022, the volume of trade reached 110–120 tonnes, valued at ₹65,000 crore.
In 2024, the volume stood at 120–135 tonnes, valued at ₹90,000 crore.
The price per *tola* is ₹100. 72,000

In 2025, gold consumption is projected to range between 130–145 tonnes, with trade turnover expected to reach ₹1 lakh crore. At that time, the average price per *tola* (10 grams) is estimated to be ₹90,000.

In 2026, gold consumption is likely to be around 115 tonnes. Trade turnover could range from ₹1.20 lakh crore to ₹1.60 lakh crore.
While gold consumption is expected to decline, the trade turnover will increase; consequently, the government’s revenue will also rise.
Approximately 70 percent of gold purchases are made for weddings.
For diamond jewelry, this figure stands at approximately 10 percent.

Diamond Jewelry
Only a select few hold the necessary licenses to operate in this sector. These licensed entities engage in the import and export of jewelry. They are required to export an amount of gold equivalent to the quantity they import. They are eligible for tax exemptions; specifically, if they export finished goods, they receive a refund on the duties paid on the raw materials. However, this process typically entails a capital lock-in period of one year.

With an 80 percent global market share, Surat stands as the world’s largest diamond polishing center and is a leader in diamond jewelry manufacturing. Gujarat accounts for a 45 percent share of India’s total diamond jewelry exports.

Surat is home to 350 large-scale jewelry manufacturing factories, all of which could potentially be impacted by these developments.

In the jewelry sector, technologies such as CAD (Computer-Aided Design) and laser engraving play a pivotal role.

Diamond Jewelry
There are 6,000 units engaged in diamond jewelry manufacturing in Surat, 2,000 in Ahmedabad, and 3,000 in Rajkot.

The Diamond Industry
Polished diamonds are utilized to craft jewelry. Consequently, approximately 1.5 million artisans and other workers within Gujarat’s diamond sector could face adverse effects.

In 2022–23, Gujarat exported diamonds worth ₹2 lakh crore. This figure subsequently declined to ₹1.20 lakh crore by 2025–26. The industry experienced a severe slump for three consecutive years. Now, due to the new taxes on gold, this figure could drop further to ₹1 lakh crore. The diamond industry has been in a major recession since 2023, and another downturn is anticipated. 12,000 small factories and 500,000 artisans will be affected.

There are also 15,000 small workshops.

There are 4,000 factories dedicated to lab-grown diamonds.

Gujarat imports diamonds worth ₹100,000 crore. It exports diamonds worth ₹200,000 crore.

**Diamond Exchange Faces Setback**
In Surat, the Diamond SEZ (Special Economic Zone) and Exchange recorded a turnover of ₹26,000 crore in 2022–23, which subsequently declined to ₹14,000 crore in 2023–24. Its current export volume amounts to merely 2 percent of its total imports.

**The Diamond Industry**
In Gujarat, factories engaged in small-scale diamond grinding constitute the largest segment of the industry. These units are likely to face adverse effects.
Gujarat is home to 1.3 million diamond artisans.
Of these, 800,000 are located in Surat, 100,000 in Bhavnagar, 50,000 in Amreli, 30,000 in Rajkot, 35,000 in Ahmedabad, 20,000 in Junagadh, 15,000 in Botad, and 25,000 across other districts.

**Decline in Trade**
Raw materials are expected to become more expensive, and business operations may slow down. Industry associations have expressed fears of a 10–15% decline in trade volume.

Gujarat is one of India’s largest hubs for gold jewelry and diamond jewelry.
Gold jewelry is set to become more expensive.
Ahmedabad