Smugglers in India are switching to cigarettes, fabric and silk yarn from other items as they are low-risk and high-reward goods, a new report released by the industry lobby FICCI said on Thursday.
"Cigarettes smuggling is a low-risk, high-reward criminal activity because high taxes on cigarettes induce great financial incentive for smugglers to earn huge profits," said the report released by FICCI's CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy).
The report titled 'Invisible Enemy -- A Threat to Our National Interests' highlights that in the last one year, the Directorate of Revenue Intelligence (DRI) seizures of smuggled cigarettes have increased by 78 per cent from Rs 90.75 crore in 2014-15 to Rs 162 crore in 2015-16, followed by fabric/silk yarn, where the increase is by 73 per cent from Rs 24.03 crore in 2014-15 to Rs 41.78 crore in 2015-16.
"The seizures of gold have witnessed an increase of 61 per cent (from Rs 692.35 crore in 2014-15 to Rs 1,119.11 crore in 2015-16). While the Department of Revenue Intelligence seizures of machinery parts and electronic items has seen a decline," the report said.
The report was released at an international conference on 'Cross Border Illicit Trade in Goods: Impact on Economy and Consumers' in collaboration with the Department of Consumer Affairs.
The conference was organised with an aim to ensure that national and international stakeholders can dialogue with policymakers to identify opportunities for joint action between governments and the private sector to combat illicit cross-border trade.
"Operations in illicit cross-border trade, is a global problem of enormous scale, impacting virtually every product sector and every country. The illicit market for fake or counterfeit or smuggled products is also one of the biggest challenges faced by Indian industry, which is impacting 'Brand India' globally," said Hem Pande, Secretary, Department of Consumer Affairs.
"Safeguarding legitimate business owners' rights is a key to sustain the country's growth strategy. Addressing these issues cannot be done in isolation; it is a joint responsibility of consumers, enforcement agencies, the industry and the government," he added.
Najib Shah, Chairman of Central Board of Excise and Customs (CBEC), said that illegal trade is a growing menace and the need of the hour is collaboration among stakeholders to tackle it.
"Growth of illicit trade through e-commerce is a new challenge, which also needs urgent attention. Unchecked, it will continue to multiply. We also need to lay equal emphasis on the rights of legitimate businesses, which are greatly impacted by illegal trade," he said.