India, like many countries has suffered heavily, both in the past & in modern times, from looting of its ancient heritage  for profit by art dealers, who sell it on to private collections. In recent years however, they have started to make more efforts to put a stop to this trade – culminating in the arrest of dealer Subhash Chandra Kapoor in Germany & his subsequent extradition to India to face charges. Kapoor is accused of smuggling eighteen 18 temple idols from Tamil Nadu.
Intriguingly, the article refers to an artefact in the British Museum – that was returned to India, following a legal case. It does not elaborate on how this was possible however, as it appears that such actions would be in conflict with the anti-deaccessioning terms in the British Museum act, unless there are other relevant points to the case that have not been mentioned.
The Hindu 
CHENNAI, July 15, 2012
The murky trail of stolen antiquities
When antique dealer Subhash Chandra Kapoor, 61, arrested in Germany and extradited to India for his alleged role in spiriting away 18 temple idols from Tamil Nadu, was produced before the Ariyalur court on Saturday, it marked the second most sensational development of its kind in the country. It also pointed once again to the inscrutable ways of the idol-smugglers and their ruthlessly creative potential.
The trail of the biggest such racket revealed so far was traced back to Jaipur. In July 2003, after a year-long surveillance, the police arrested Vaman Narayan Ghiya, the owner of a handicrafts shop in the Rajastan capital. His shop was only a front; in reality it was a hub of illicit trading in antiquities.
The New Yorker, in a story on Ghiya in May 2007, described how 348 sculptures, a dismantled Mughal pavilion and antiquities of all kinds were recovered from his shop.
Smuggling antiquities is a theoretical impossibility. All ancient art objects including privately owned ones must be registered with an appropriate authority. Their export is banned. Any newly made artefact that resembles an antiquity must be certified by the archaeological authorities as being so and declared as not historically valuable before they can be taken out of the country. Customs authorities are to check for all art objects that are carried in person or shipped.
However, looking at the regular appearance of Indian antiquities on the stolen list of Interpol, it is clear that the preventive net has gaping holes and that the system is not really working.
Smugglers would not steal objects directly. They deploy a well-oiled network of local petty thieves and middlemen to scout and steal from poorly guarded temples and museums. Once the stolen goods reach their ‘shops,’ they would pack them along with other handicrafts with proper certification and purchase bills in large containers and ship them out. In the absence of enough container scanners and comprehensive checks by Customs officials, the stolen antiquities would easily slip through.
Police sources say that smugglers from Tamil Nadu typically invest less and sell big. They would not use large containers to transport a few stolen sculptures. Instead, they would make replicas of stolen idols, forge signatures of stapathis or traditional sculptors who have their workshops with proper addresses, declaring that the sculptures were cast in their ateliers. The certifying authorities are often unable to make out the difference and thus many stolen idols slip through.
Selling a stolen artefact is not easy in the international art market. Increasingly, wealthy buyers demand to know the provenance of antiquities. To circumvent this, smugglers would first ship illicit antiquities to friendly art houses and galleries in cities such as Zurich and Hong Kong, or use their own network of offices. The stolen objects would then reach auction houses in London or New York with newly acquired addresses.
India Today, which was among the earliest to elaborately expose Ghiya’s illegitimate operations, in June 2003 described how 34 catalogues each of Sotheby’s and Christie’s on Indian and South-East Asian art, along with stolen material, were found in his shop. Ghiya identified 700 artefacts which figured in the catalogues.
Once the stolen antiquities reach private collectors, museums, and auction houses, it is difficult to recover them. India learnt it the hard way.
In 1982, a striking 12th century Nataraja bronze stolen from a temple in Tamil Nadu in 1976 was displayed in the British Museum. After receiving a tip, the Indian High Commission in London alerted the London police and the sculpture was confiscated. The British Museum contested the ownership of the bronze. In the eyes of Indian law, Gods residing in temples are legal entities. Hence, the Indian government fought the case in the name of the God. Entomologists were summoned to inspect and testify the termite runs on the icon. After a long battle, the case was eventually settled in India’s favour in 1991. Pathur Nataraja triumphantly returned to Tamil Nadu and was received with fanfare.
No less frustrating is the case of the Sivapuram Nataraja bronze stolen in 1956. The Norton Simon Foundation in the U.S. ,which bought this sculpture, planned to display it at the Metropolitan Museum in New York in 1973. When the Government of India filed a lawsuit for its return, an out-of-court settlement was reached. The Simon Foundation was allowed to display the icon for 10 years and then return it.
Interpol sees such illicit trading to be widely prevalent and considers it as menacing as arms and drug trafficking. Despite international conventions prohibiting trading in illicit antiquities, and museums increasingly opting to follow ethical practices, stolen antiquities add up to a multi-billion-dollar industry. Unlike in developed countries, Indian museums and religious institutions that possess antiquities have poor documentation, and the police are largely ill-equipped and lack expertise. As a result, many of the antiquities stolen from India remain untraced.
The Ministry of Culture in 2007 listed 13 objects that are yet to be brought back to India. In 2010, in a written reply in the Lok Sabha, it admitted that no stolen or lost antiquities had been retrieved or recovered during the last three years.