In February 2018, I predicted that Modi government will restate the value of the “assets” seized from Nirav Modi’s retail stores. This is because jewellery stores mark up the value of their stocks in many ways. First, the value of non-precious items such as paint and plastics on the jewel is given the same treatment as gold when selling to the customer. When the customer wants to sell it back to the store, these non-precious items are scrapped off the jewel and only the melted gold is weighed and valued at prevailing bullion market rates. Second, depending on the market standing of the store, a “brand premium” is added to the value of the articles. In case of designer jewellery, this can be double the value of the article purchased. Third, Indian government officials pocket some of the valuables during the raids.
People should realize that the ED was quite aware of this. They were under pressure from Modi government to inflate the value of the asset seizures.