Gold traders are taking advantage of loopholes in Indian rules to get the precious yellow metal from foreign markets.

To cope with restrictions on gold imports, traders are reportedly paying non-resident Indians (NRI) for their air tickets if they agree to carry gold. It may be noted here that Indian rules allow each individual to carry up to 1kg of gold.

Requesting anonymity, an airport official revealed that nearly 80kg of gold was brought in by NRIs on a flight from Dubai to Calicut this month.

Sudheesh Nambiath, an analyst with Thomson Reuters GFMS, said, "To take advantage of high premiums, agents have been increasingly successful in scouting for NRIs, and pay for their partial or full air fare."

The All India Gems & Jewellery Trade Federation's director, Bachhraj Bamalwa, supported the controversial act of traders saying there was nothing illegal about it as the NRIs pay the duty on the gold they bring.

Estimates suggest that NRIs can save up to Rs 150,000 per kg on premiums even after paying the import duty on the gold they carry.

The government placed many restrictions on the import of gold earlier this year as part of its efforts to curb widening current account deficit. But, the restriction prompted traders to get the metal through other ways, including smuggling. As per available figures, customs officials seized nearly double the amount of smuggled gold between April and September this year compared with the corresponding period of the previous year.