- Industries that cause maximum revenue loss to the exchequer: tobacco products, mobile phones, alcoholic beverages
- Increased incidences of seizures by DRI of highly smuggled goods of Gold, Cigarettes in recent months
- 136%* increase in number of incidents of smuggling of cigarettes and tobacco products since 2014-15
Delhi, 27 March 2018: FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) an industry body working on addressing the issue smuggled and counterfeit goods in the country is organzing large-scale awareness programmes nationally involving the government and other agencies to fight the menace of illicit trade. As part of the awareness campaign, it has lined up a slew of activities, including seminars, youth and consumer sensitization programs, capacity building of enforcement officials in different states including Kerala, Tamil Nadu, Delhi, Karnataka, Jammu & Kashmir etc. Today, FICCI CASCADE organized a seminar on ‘Combating Counterfeiting and Smuggling – An Imperative to Accelerate Economic Development’ with representation from enforcement agencies and policy makers of Tamil Nadu Government.
FICCI also highlighted incidents of increasing number of seizures especially for products lie Gold, Cigarettes, Machinery Parts, Fabric/Silk Yarn and Electronic Items that has witnessed the highest number of DRI seizures in the past few years. The number of incidents of smuggling of cigarettes & tobacco products in India has increased by 136%* from 1312 cases in 2014-15 to 3108 cases in 2016-17.
While there is an increase in vigilance by the enforcement agencies, it must be noted that the seizures are only the tip of the iceberg of a much larger and threatening operation in illegal trade in the country.
The market for contraband and smuggled goods is thriving in India and is today one of the biggest challenges faced by Indian industry. As per FICCI CASCADE report, the total loss to the government on account of illicit markets in just seven manufacturing sectors is Rs 39,239 crores in 2014. Amongst the various sectors, the maximum revenue loss to the exchequer on account of counterfeiting and illicit trade is attributed to tobacco products, estimating a revenue loss of Rs. 9139 crores followed by mobile phones at Rs 6705 crore and alcoholic beverages at Rs 6309 crore. The estimated loss to the industry in just 7 industry sectors is Rs 1,05,381 crores, an increase of 44.4% between 2011-12 to 2013-14.
The existence and operation of illicit markets such as smuggling and counterfeiting has been an enduring problem that has escalated in scope and magnitude, impacting industries, government, economies and, the health and safety of the consumers. Moreover, smuggling operations have close links to terror organizations and criminal networks. In fact, it is today one of the biggest challenges faced by India and its industry, tarnishing the country’s image in the global arena.
According to another recent FICCI report, ‘Illicit trade: Fueling Terror Financing and Organized Crime’, India is the third most affected country by terrorist activities in 2016, with the first and second positions occupied by Iraq and Afghanistan, respectively. As per the United Nations Commission on Crime Prevention and Criminal Justice (UNCCPCJ), counterfeiting is the second largest source of income for criminal activities such as terrorism, globally. Terrorist organizations are manufacturing counterfeit goods and smuggling them across borders to finance their crime operations. The report also highlights that the total employment losses globally due to counterfeit and piracy stood at 2 to 2.6 million jobs in 2013 and is expected to rise to 4.2 to 5.4 million jobs in 2022, suggesting an approximate increase of 110 per cent.
Mr. P. C. Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Excise and Customs, says “During the last twenty years, the volume of the counterfeiting activity has increased 100 times and the size of trade in counterfeited goods is 10% of the legal international trade (around 2% of the world’s overall economic output). The problem of illicit trade is much more serious than it is commonly perceived. It has a huge adverse impact on the security and economy of the country, revenue of the government, health of the people and on the environment. There is also no doubt that the illegal money generated through illicit trade in smuggled, counterfeited and pirated goods is a major source to finance such dangerous activities as terrorism, insurgency and other organized crimes.”
“It is time that we, as a nation and as a part of the global economy, call for stern and resolute counterstrike measure against such ill-intentioned activities; starting with greater vigil at the borders to bilateral and multilateral engagements between nations strengthening the enforcement agencies and working towards the removal of ambiguities in the law related to illicit products. The need of the hour is tangible actions to increase enforcement and to impose increased punishments. This is imperative to reassure legitimate business owners and consumers that the government is serious about protecting right owners which, in turn, would elicit greater support for government policies”, observes Mr. Deep Chand, who is an Adviser to FICCI CASCADE and former Special Commissioner of Delhi Police.
- *Starred Question no.305 of 8th August, 2016 in the Lok Sabha answered by Smt. Nirmala Sitharaman, Hon’ble Minister of State (Independent Charge) of Commerce & Industry
- **Unstarred Question no. 1153 of 22nd December 2017 answered by Shri Shiv Pratap Shukla, Minister of State in the Ministry of Finance.