Colossal shipments of gold leaving Switzerland for India in recent months have alerted top Central agencies, such as Intelligence Bureau and Customs, on the possibility of the Indian black money stashed in Swiss banks being routed back to the country in the form of gold through hawala operators active in Dubai. Swiss
authorities peg gold import by India at 1.63 billion Franc (Rs11,000 crore) in the month of June.
Data from Swiss government reveals that bullion exports to India accounted for 41.91 per cent of total June exports. In the month of May, bullion exports to India from the country formed 33 per cent of the total shipments. of the total Rs 50,000 crore worth exports to India in the first six months of the calendar year, June alone accounted for 22% of the entire shipments – indicating a rising trend.
According to finance ministry sources, both Central Bureau of Excise and Customs and the Intelligence Bureau have been alerted on the matter, especially after the spurt in the gold imports from Switzerland following the National Democratic Alliance government's tough stance on the issue of black money stashed abroad.
According to data from Swiss Customs administration, the country exported a total of 44.2 tonnes of gold, silver and coins to India in June alone. The United Kingdom and Hong Kong are two bigger export markets for Switzerland gold, accounting for 139.4 tonnes and 84.6 tonnes respectively.
While the Swiss authorities say it is too early to suggest that the Indian currency stashed illegally in their banking system is being converted into gold and being imported back in India, the finance ministry is monitoring the issue closely. Anne Cesard, deputy head of communications at the Switzerland State Secretariat for International
Financial Matters, told dna, "Both these issues should not be linked at this point of time. It will be too early to comment on that."
Interestingly, a study conducted by Centre for Global Development in November 2013 on India's gold fetish and Swizerland's secrecy points out that the country has a policy of data secrecy on gold related matters as transparency hurts its banking sector.
The finance ministry, meanwhile, is in no mood to leave anything to chance. A senior ministry official told dna, "Both Central Bureau of Excise and Customs and Intelligence Bureau are keeping a close watch on the matter. We have been observing the developments for almost a month now."
Meanwhile, the Swiss government has not replied to the letter sent by finance minister Arun Jaitley immediately after taking over the reins of the ministry seeking details of the unaccounted money stashed in Swiss banks. The Swiss government has also not ratified the multilateral convention on mutual assistance in tax matters adopted by
it last year. "There has been no communication with the Indian government on any matter in the month of July. Also, we are yet to ratify the convention. The next Parliament session will be held in September, but we cannot comment whether the declaration will be taken up for voting," said Cesard. Unless Switzerland's Parliament adopts
the convention, India cannot engage meaningfully with the country on tax related matters.
In a discrepancy pointed out by the Centre for Global Development in its study, the country's financial savings have been falling relative the GDP as gold imports have been rising, an indication that the gold import economy is based significantly on the unaccounted resources. Share of gold imports has doubled in the last 14 years, while the household savings have declined from 11% in 1998 to 9% in 2008, according to the study.