Panaji, Oct 9 (IANS): Smuggling of gold into India is a challenge for the customs department and the menace has to be handled at a policy level, Central Board of Excise and Customs chairman Najib Shah said on Friday.

"Till such time the local demand is not met and there is a duty on it, there is profit involved in the smuggling of gold. Gold smuggling is a challenge. It has to be met at a policy level," he said, while speaking to reporters after the conclusion of the 11th Asia Europe Meeting (ASEM) of the Directors General/Commissioners of Customs held here.

Shah also said that a combination of the 10 percent import duty on gold and India's insatiable fascination for the precious yellow metal was one of the reasons why it figures on smugglers' list of contraband.

"As you are aware there is a 10 percent duty on the import of gold. You are also aware that we have an insatiable liking for gold. The demand for gold has always been high," he said.