Boxes of imported goods, supposedly unavailable in India's heavily protectionist economy, lined the shelves of rough wooden stalls set up on the sidewalks of one of Bombay's busiest downtown thoroughfares.
French perfumes, American safety razors, German kitchen appliances and a host of Japanese products including watches, cameras, radios and tape recorders were openly for sale here--even though the government bars their import for commercial purposes and imposes duties as high as 320 percent to discourage Indians from bringing them in for personal use.
The stalls along Dr. Dababha Navraji Road here are known as "Smugglers' Row."
All the foreign-made merchandise there was probably smuggled into the country on speedy dhows--the motorized version of sailing vessels that for centuries have plied the Arabian Sea. The goods, many of which bear labels with Arabic script, probably came from traditional smuggling ports such as Dubai and were landed in the dead of night at any of the thousands of coves and inlets that dot the rocky coastline near here.
Bombay, India's richest city, is considered to be the smuggling hub of the country.
Smuggling is big business in India, which protects its own industries with some of the highest tariffs in the world. The authoritative Times of India newspaper this month estimated the value of goods smuggled into India at more than $7 billion a year--a figure that is half the total of all the country's legal imports and about the same as the total of India's exports last year.
Besides sneaking in foreign goods that generally are not available here, smuggling of gold has increased this year as the world price has dropped while the Indian market has remained firm.
Late last month, gold was selling for about $440 an ounce here while the world market price fell to around $300 an ounce. As a result, about one-third of all gold sold in Bombay markets is believed to be smuggled--again, largely from Dubai.
Customs officials here estimated that during the first four months of this year $36 million worth of gold was smuggled into India, where jewelry traditionally serves as a measure of a family's wealth and where it is hoarded for possible hard times.
That compares with an estimated $25 million believed to have been smuggled in during the first third of last year.
The sharp increase in gold smuggling, which calls for cash payments in hard currency, has cut sharply into the supply of American dollars in India. Banking sources here and in New Delhi complained that the dollars in circulation have dried up to the point where they have no bills available for travelers.
As a result, a black market in dollars has moved into the open for the first time in three years, with the street price now running about 30 percent higher than the legal bank rate.
Black market dealers sidle up to Westerners on major thoroughfares here and in New Delhi to offer 12 to 13 rupees to the dollar. The bank rate is about 9 rupees.
Not all these currency dealers are seedy characters. A well-dressed, white-haired woman approached an American in a shop here offering to buy dollars. The woman ran off when the American commented loudly that private currency transactions are illegal in India.
Despite the increase in gold smuggling, the major trade remains in foreign goods, which are prized highly by Indians both for the status they offer and because Indian-made consumer products are not as well made as similar products from Japan or the industrialized West.
Simple American safety razors and blades, for example, are valuable here because the Indian ones are so shoddy. Similarly, Indian watches or radios are considered vastly inferior to Japanese products that cost less money elsewhere.
There is a strong feeling among Indians that products made here need heavy tariff protection because they could not compete if foreign goods were readily available.
Moreover, many products in common use elsewhere are not made in India. When an Indian-made tampon product was introduced two years ago, for instance, a quarter-page newspaper advertisement contained the line, "Now with reasonably priced Comfit tampons, there's no need to pay exorbitant rates for smuggled tampons."
In fact, smuggled goods are often only slightly more expensive on the streets here than they would be in Western cities, generally because they come in from duty-free ports.
A Panasonic radio-tape recorder, for instance, was offered on the streets here for $200, but the dealer quickly began dropping his price.
A Sony Walkman, the latest Indian status symbol, sells here for only about $30 more than the Hong Kong price. And top brand video cassette recorders, which would cost close to $9,000 with all the duty paid, can be bought from Bombay smugglers for about half that. The same set sells for about $1,600 in Dubai or Singapore.
Smuggling is so important here that makers of popular electronic gadgets advertise their wares in Indian newspapers and magazines even though they cannot be sold legally here.