When US military aircraft smuggled gold into India
by Atul Bhardwaj on 11 Dec 2015 2 Comments
In the 1950s, India, a gold guzzler had banned import of gold. In sharp contrast, the bullion markets in Hong Kong and Macau were free of government controls, incentivising the Chinese syndicates to smuggle gold into India where the price of the yellow metal was the highest in Asia. Normally, gold entered India hidden in boats and the bulkheads of ships and was smuggled in through the dock gates by the ship’s crew concealing gold ingots in their bodily cavities. 


In June 1954, Custom House, Calcutta (now Kolkata) confiscated 560 bars of gold worth £61,000 from Eastern Queen, a vessel owned by the Hong Kong based Indo-China Steam Navigation Company. Almost six months later, on 29 December 1954, at about 8.30 a.m., near the crossroad of Canning Street and Clive Street in Calcutta, the customs team intercepted the courier, a ‘respectable’ person hired by the smugglers. This was an intriguing catch, because “an entirely different racket unconnected with the Chinese traffic” emerged after the case unravelled. The new players neither belonged to the Hong Kong-Macau network, nor were they using the sea route to smuggle in the yellow metal. 


The carrier was W.B. Zadkar, a 37 year-old ground engineer of the British Overseas Airways Corporation (BOAC), Calcutta, where he had been working since the mid-1940s. Prior to joining BOAC, he was in the Indian Air Force. 


Zadkar was apprehended when he was about to reach his destination at 164, Cotton Street, Calcutta, the house of the president of the Bullion Merchants Association of India, to deliver two tin boxes that had landed on Christmas night in a KLM flight.


One box contained 10 bars weighing approximately 50 tolas (583.20 grams) each, and the other had 42 bars of smaller size, each weighing approximately 10 tolas (116.63 grams). The custom official reported that rough illustrations on the small bars read: “NM Rothscheld (Rothschild) & Sons RMR” and “10 tolas 999.0”. 


Zadkar was initiated into the gold smuggling racket by an unknown person who used to call up at his office phone using different names. The mysterious man, who looked like an “Arab or a Westerner but not a Chinese” had first met Zadkar at Grant Hotel, Calcutta. Five months prior to being apprehended, Zadkar had got a cable from London that stated “Shipped two carpets on Thai”, which meant that two boxes of gold had been dispatched on their plane. 


During his five-month-old association with the smuggling gang, Zadkar handled gold worth £31,000. For three-and-a-half months, Zadkar’s job was confined to take over the stuff from the plane parked at the tarmac and deliver it to people waiting outside the gate in a car. Later, he was asked to deliver the stuff directly to various locations in Calcutta. 


The most intriguing revelation in Zadkar’s testimony was that on at least six occasions he had picked up gold from the “chokes” in the USA Air Force planes, MATS Skymaster. India had an agreement with the US government that permitted Military Air Transport Services (MATS) planes night halt facilities at New Delhi and Calcutta airports. The customs’ report corroborated that in the period between the months of August and December, 1954, nine US Air Force Douglas C-54 Skymaster planes and two Thai Airways aircraft night-stopped at Dum Dum airport. These planes were prohibited from carrying arms, ammunition and military personnel in uniform; however, they often violated these guidelines.


Zadkar’s revelation about the involvement of US military aircraft in the smuggling net led the customs collector, Calcutta to seek Ministry of External Affairs’ (MEA) permission to rummage the US army aircraft. The MEA was reluctant to give a blanket clearance to search military aircraft because such flights could be searched only on confirmed suspicion that they were carrying arms, ammunitions and other military hardware.


This particular incident triggered an inter-departmental debate within the government at New Delhi. The customs department argued that the immunity accorded to military aircraft was invalid if it indulged in smuggling of contraband goods, because such acts violated the customs regulations. The Customs department wanted explicit permission to rummage foreign military planes, without having to wait for permissions from New Delhi. 


Finally, on 1 February 1955, the Ministry of Finance (Revenue Division) passed an order stating that “if the customs authorities have a definite suspicion that any article (including those other than arms) are being smuggled into or from India in military aircraft, they will be perfectly within their right to search such aircraft and their personnel.” Incidentally, with effect from 1 July 1955, the Indian government levied handling and housing charges on all US military aircraft using civil airports in India. 


The American smuggling racket may have  been a part of the CIA network in Asia, especially when they were in the process of building up their assets in Tibet for a rebellion against the Chinese government in the mid-1950s.  


This article is based on a secret Ministry of External Affairs file of 1955 at the National Archives of India, New Delhi  

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