Lured by diesel selling for less than half its legal onshore price, growing numbers of Indian fishing boats are buying smuggled Iranian fuel from the Karachi-based high-seas traffickers, police sources have told The Hindu.

Ever since February this year, the Mumbai Police have made 49 arrests related to fuel-smuggling. Launches modified to hold fuel were seized in nine cases, each involving tens of thousands of litres of fuel. In an August 2011 case alone, police recovered a staggering 50,000 litres.

Driven by diminishing catches and high fuel prices, the surge in fuel smuggling is raising new terror concerns along India's western seaboard.

Lashkar-e-Taiba commanders are believed to have drawn the Porbandar-registered fishing boat, Kuber, alongside their ship with an offer of cheap fuel before hijacking it to transport the team that carried out the 26/11 attacks in Mumbai.

Prices of diesel at Indian ports are typically three times as high as the cost of smuggled Iranian fuel. In Karachi, smuggled Iranian petrol is reported to retail for Pakistani Rs.34-Rs.38 a litre, and diesel for Rs.28-Rs.32. Iranian petrol and diesel both retail for Rs.30-Rs.33 a litre in Quetta, while consumers in the port town of Gwadar can buy it for as little as Rs.24-Rs.30.

Fears that terrorists could exploit gaps in India's coastal defences were underlined in August, when Pavit, a 1,000-tonne Panama-flagged merchant ship, ran aground in Mumbai, evidently undetected by a three-tier security ring.

In its annual report for 2010-11, the Ministry of Home Affairs records that 183 interceptor boats had been provided to Gujarat, Maharashtra, Goa, Karnataka, Kerala, Lakshadweep and Daman and Diu since April 2009.

Sources in the police and the Coast Guard, though, said these boats would be of little use until India's fishing boats were fitted with specialised transponders that would allow unidentified and potentially hostile vessels to be intercepted with precision.

Highly placed defence sources, however, said the trial of the three systems — satellite-based tracking, Very High Frequency and the Automatic Identification System — were just beginning, and would take over a year to complete. “We will also have to find a way to make the systems affordable,” a senior police official said, “because the fishing fleet isn't in a position to cough up commercial rates for this kind of equipment.”