Pakistan Enforces 30-Day Ban On Gold Imports To Stall "Steep Increase" In Smuggling To India

Tyler Durden's picture

As we have discussed numerous times, India's ban and tariffs on gold imports (supposedly to protect their current account balance) is having numerous unintended consequences. From flights full of gold-laden passengers entering the country,  to trying to roll-back centuries of tradition surrounding Indian weddings, the capital control efforts are back-firing as the smuggling epidemic spreads. The foolishness of this 'control' is also spreading as Pakistan has noticed the surge in smuggling, concerned at a steep increase in import duties on gold in a "neighboring country," and has imposed a 30-day ban on gold imports to curb the 'trade'.



(Via Bloomberg)

The ban is only to stop the smugglers...

Ban to curb smuggling without affecting legitimate demand-supply

Which of course will always wear a patch over one eye and skull and crossbones bandana to ensure officials can tell them apart from the legitimate demand-meeters...

But what is there can be exported...

Export of gold to continue without any restriction

At a nice profit to the high-premium-paying Indians.

Of course, this is not about managing the status quo or manipulating gold prices, this is about managing the FX rate (because the reason the rupee is tumbling is all about gold and nothing to do with fast money outflows thanks to the Fed)...

Impact of gold smuggling on Pakistan rupee exchange rate raised by foreign-exchange traders at recent meeting

This is not the first time they have tried such a plan...

Pakistan had imposed a ban on duty-free import of gold on July 30 for 30 days on concern rule was being misused and imported gold was being smuggled to India

So, of course, that worked so well before that they will just keep repeating the same failed plan...?


So India's efforts have led to Pakistan's controls... what next? Tell the Chinese to stop or the Blangladeshis... or Myanmar and Sri Lanka?

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Sudden Debt's picture


Pladizow's picture

“Gold is my enemy. I’m always watching what it is doing.” – Paul Volcker as Fed Chairman

Manthong's picture

Oh, heavens to Mergatroid!

The Pak hefe’s want to tighten the borders for something..

What or who could possibly be driving that move?

kliguy38's picture

Its for Moar freedom and to protect our way of life

AlaricBalth's picture

Here is a fun fact.

When the Central Bank of Pakistan was established in 1948, after splitting from the Central Bank of India, the Secretary of Finance for Pakistan was a British subject named Sir Victor Turner.

After stepping down as Secretary he was named economic advisor to  Thomas De La Rue and Co, Ltd.,  currently the world's largest commercial currency printer and papermaker, producing billions of banknotes every year.

BaBaBouy's picture

Can You Spell "Physical GOLD Shortage" ???

nope-1004's picture

The system is being prepped for a paradigm shift to take place.  First, currency and price controls.  Then, shipping and logistics bottlenecks.  Then, outright war.

After the Olympics, things will heat up.


fonestar's picture

Efforts to ban gold "smuggling" will be almost totally unsuccessful.  Efforts to ban Bitcoin "smuggling" will be totally unsuccessful.

Manthong's picture

gotta' love those fun facts  :-)


MeelionDollerBogus's picture


(abbreviated spelling)

CheapBastard's picture

...and in other news, wealthy Pakis and Afghanis are smuggling record amounts og gold out to Dubai accordiong to news reports.

MeelionDollerBogus's picture

credible reports?
Amounts perhaps disclosed?
I wonder how the risk is there for drone-strikes...

disabledvet's picture

As America's "you can not only keep your gun but you can have more" foreign policy plan continues to bear fruit.

Uchtdorf's picture

It's for the children, because their parents obviously don't know how wonderful fiat is.

BandGap's picture

The Isoquants of Pakastani etch-a-sketch.

TaperProof's picture

Where do I order gold and silver fishez?  I keep hearing you guys talk about them here but can't for my life find any.


midtowng's picture

India and Pakistan are practically enemies when it comes to the military, yet they can work together to restrict gold imports.

So who is the real enemy here?

disabledvet's picture

See below and "lack of dollars." Plus Americans are burning corn in their fuel tanks. Ironically soda prices haven't soared.

Pladizow's picture

Prepare for another gold smack down!

Sudden Debt's picture

Hope so... got my buy orders for tomorrow morning already set in at a 2% drop.


Martel's picture

London's open, and their daily fix was fine. Apparently, needs to be fixed...

RacerX's picture

don't they know that gold is just a barbarous relic?

Sudden Debt's picture

they're a barbaric kind of people...

Dr. Engali's picture

Free markets must be prevented at all costs.

NoDebt's picture

If there is anything hopeful in this article, it might be that imposing capital controls of any stripe may prove much harder for sovereigns to accomplish successfully than in the past.

JustObserving's picture

Gold is suppressed in India under instructions from Washington.  Virtually all Indian politicians are venal and easily subject to blackmail from the vast illegal NSA data collection from India (13.5 billion pieces of intelligence a month).  Even the former prime minister of India, Morarji Desai was on the CIA payroll as revealed by Seymour Hersh. Desai sued for libel and lost.

India is a US fiefdom today.

Kirk2NCC1701's picture

Indian Call Center:  "Hello, this is Peggy."

sessinpo's picture


They are of the few remaining that are still aligned with the petrodollar while many other nations are moving away from the US dollar currency reserve system. Many in Asia, Russia, the BRICs are getting out of the American fiat system.

Gold back trading note for international trade with national currencies kept local. No more world wide fiat that distorts and passes inflation to other nations. This is why we see mnay nations trying to repatriate their gold holdings while other nations are hoarding them.

chindit13's picture

Dear JustMakingitUp,

Gold was surpressed because in combination with oil, imports were slaughtering India's current account and the rupee was getting routed. The US couldn't care less how much or how little gold India imports.

As for India being a US fiefdom, see 'Devyani Khobragade'.  You have no idea how little you know or foolish you look.

Get out more.  There's a whole world out there whose story isn't contained on the websites of the Internet Gurus or Gold Promoters.


disabledvet's picture

That's one of the "oddities" of a deflation. "Too much goods production at too low a cost AND price."

fijisailor's picture

Pakistan is even more corrupt than India.  This action is totally useless and designed to pad customs officials' pockets.

Winston Churchill's picture

Something else is going  on.

Been through that customs point often in the past.The rest of the border is very heavily militarised by both

India and Pakistan.Its hard to smuggle anything across even with bribes.

The traditional smuggling route for gold into India has been by dhow from the Gulf states inro the Mumbai surrounds.

The Jains run all the  gold smuggling, and they are Mumbai based.

fijisailor's picture

If you say so.  It's hard to believe that long border between the 2 is impervious to smuggling.  I have a good Paki friend who contends that everything is up for sale under the table.  The rule of law is a very wavy line in that part of the world.  Besides, this new law is aimed at stopping smuggling so obviously your theory about strict control doesn't quite make sense.

Winston Churchill's picture

Taking statements at face value in todays world is very naive.

There are much easier ways to move large quantities of gold  into India, so something doesn't ring true.

Indians don't cross caste occupations.The beggars have a caste, so do the smugglers.

The law may be tenuous, but the caste system is rigid.

fijisailor's picture

"There are much easier ways to move large quantities of gold  into India"

In India it's not about a few large quantities.  When people work for pennies per day it's millions of tiny trickles that make up the large quantities of smuggling.

Winston Churchill's picture

Dhows bought gold in for decades.

In large quantities, coin,scrap etc. from the souks in Dubai and Abu Dahbi.

A lot of the jewelry trade in India is in Rajahstan,Maharistra and southern India.

Just makes no sense to smuggle through Pakistan at all.

Hashish came south thru Pakistan before Uncle Scam ramped up poppy trade in Afghanistan.

Silver,silks, cloves and other things went north back over that border.

disabledvet's picture

I thought Kashmir sat on both sides of the border?

Winston Churchill's picture


Nasty drive down to the plains,  unless you like 100 miles of continuous hairpin bends.

Mindblowing at night, watching headlights 2000 ft above you.

Everybody should do that once.

chindit13's picture

Good stuff.  I might even want to check your skippers license for the dhow.  Ha!  This part of the world is oddly attractive, in a swashbuckling sort of way.

As for the Himalayan drive, yes, everyone should do it once.  In fact---as I'm sure you know very well---many ONLY do it once.  I have a particular fondness for Manali to Keylong, then over to Leh and up to Nullu.  In a Scorpian.

Volaille de Bresse's picture

If they fail to prevent gold smuggling I can see a wave of speculation againt the Paki rupee coming from Wall St...

trader1's picture

Pakistan's PM also banned himself from attending Davos this week. (due to terrorist attacks apparently)

After the spate of terrorist attacks inside Pakistan, Prime Minister Nawaz Sharif has decided to cancel his scheduled visit to Davos, Switzerland from January 21 to 24 to attend the World Economic Forum (WEF) meeting.

A foreign office statement on Monday said Pakistan represents WEF’s second largest membership base in South Asia, with a total of four foundation members and eight global growth companies. During his visit, Mr. Sharif was scheduled to meet a number of world leaders, heads of international organizations and multinational companies. The Prime Minister’s programme also included a breakfast meeting with Pakistani businessmen, and a luncheon meeting with heads and CEOs of multinational companies, academics, representatives of NGOs and the media.

In Geneva, he was to visit the European Organization for Nuclear Research known as CERN. Pakistan has a long-standing cooperation with CERN and Mr. Sharif was to address the scientists there and witness the signing of two agreements between the Pakistan Atomic Energy Commission and CERN, the statement added.


in other news:

ISLAMABAD, Pakistan—Pakistan is in talks with China to acquire three large nuclear power plants for some $13 billion, Pakistani officials said, in a further blow to international efforts to restrict the trade in nuclear technology.

The deal is in addition to last year's agreement to build two Chinese reactors in Pakistan's southern port of Karachi.

The agreement, if reached, would help plug the crippling gap in Pakistan's electricity supply and cement its strategic regional alliance with China, which is aimed against mutual rival India. Alarming Washington, the China-Pakistan nuclear trade bypasses international rules against nuclear exports to countries—like Pakistan—that have not signed the Non-Proliferation Treaty.

ISLAMABAD (Thomson Reuters Foundation) – Amid a growing energy crisis, Pakistan is installing a 1.8 megawatt (MW) solar power plant at the Parliament House building in the capital city Islamabad.

Work on the project began in the first week of January. The initial cost - which is being funded by the Chinese government as a friendship gesture - is estimated at $60 million. The solar plant is projected to save almost $1 million each year in utility bills for the parliament complex.

MeelionDollerBogus's picture

Good thing no one's worrying about nuklar ter'rists or nuklar armz.
In Pakistan.

kay, nao everywun go yell at the eye-ran!

silvermail's picture

War between China and India - is the main dream of the Fed.
They would like to assist both of them in exchange for their gold.

BigJim's picture

 The initial cost - which is being funded by the Chinese government as a friendship gesture - is estimated at $60 million. The solar plant is projected to save almost $1 million each year in utility bills for the parliament complex.

Costs $60,000,000, but makes $1,000,000 a year. Gee, what an 'investment'. I'm surprised Obama didn't forward US taxpayers' money to fund such a brilliant scheme.

Element's picture

BTW, the yellow stuff on the shaft's rock walls is sulfur.

trader1's picture

for those who don't know, fast forward to 01:08:32 of this clip to see a sulfur mining operation.

in any case, that whole film is worth a watch.