Gold import jumped Rs11.27 billion in the first six months of the current fiscal year, up 514 percent, largely due to control in smuggling.

According to the Department of Customs, Nepal imported 3,013 kg of gold during mid-July to mid-January, up from 466 kg during the same period in 2014-15.

Gold import bill has increased to Rs11.27 billion in the first six months of the current fiscal year, up from Rs1.83 billion in the corresponding period.

Gold traders and bankers attributed significant imports to the government move to curb smuggling.

Of the total import, 1,950 kg has been imported from the UAE, 400 kg from Turkey and rest of them from other countries. Due to an increase in the import volume, the revenue collection of the government increased to Rs1.26 billion from Rs246 million in the review period.

Bhisma Raj Dhungana, chief of Foreign Exchange Department at the Nepal Rastra Bank (NRB), said that control in smuggling this year has led to traders to import the yellow metal through a formal channel. “As a result, imports went up at the maximum value,” he said.

Bhuvan Dahal, chief executive officer of Sanima Bank, said the closure of Tatopani trade route this year had helped in the decrease gold smuggling. The trade point has not resumed operation since the April 25 earthquakes.

Dahal said banks last year were also unable to sell the gold they imported due to rampant smuggling. “Banks failed to sell gold last year as market had been flooded with smuggled gold. As a result, banks had excess amount of gold in their reserve,” he said. NRB statistics also showed that the gold imports during mid-July to mid-January period had plunged 84.9 percent last fiscal year.

Gold traders said that the drop in gold prices in the domestic market in the initial months this year and curb in smuggling soared demand. “The falling price also attracted buyers, inducing banks to regularly import the precious metal,” said Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).