FICCI Cascade Seminar On ?Combating Counterfeiting and Smugglin
FICCI Cascade Seminar On ‘Combating Counterfeiting and Smuggling' – An Imperative to Accelerate Economic Development’
Chennai: FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) organized a seminar on ‘Combating Counterfeiting and Smuggling – An Imperative to Accelerate Economic Development’. The seminar discussed the importance of increased awareness on the hazards of counterfeiting and smuggling, and the need for effective enforcement to enhance India’s economic development.
Dr. K Jayanth Murali, IPS, ADGP Crime Branch CID, Tamil Nadu stated, “The illicit market for fake and smuggled products is one of the biggest challenges faced by Indian industry. In India, the issue of fake currency is also a serious problem as it is lucrative, offering higher returns. India has porous borders with countries like Nepal and Bangladesh which gives smugglers good opportunity to smuggle products into India. China is also posing a serious threat to India on this issue.”
Thiru R. Srinivasa Naik, Commisioner of Customs, Chennai Customs Zone stated, “In India, there is a strong demand for cheaper branded products from Toys to Airplane parts. Apart from significant economic loss in terms of revenue, the illicit and smuggling activities affects consumer health and safety, promotes money laundering causing huge loss of reputation to brand owners and our country as whole.”
The market for contraband and smuggled goods is thriving in India and is today one of the biggest challenges faced by Indian industry. Industry body, FICCI, has set up a committee named CASCADE, with the participation of leading industries from all sectors of the economy.
As per FICCI CASCADE report, the total loss to the government on account of illicit markets in just seven manufacturing sectors was Rs. 39,239 crores in 2014. Amongst the various sectors, the maximum revenue loss to the exchequer on account of 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 study also establishes a relationship between high taxes and availability of illicit products. High tax rates tend to exacerbate illicit markets by creating greater demand for cheap and counterfeit substitutes. A significant reason being that high tariffs and taxes create opportunities for those involved in illicit markets to step in and supply ‘reduced’ versions of the original product at lower prices.
Tamil Nadu state has traditionally been a hot bed for the smugglers because of factors like its vast coastline. As per reports, a number of seizures of highly smuggled goods such as gold, cigarettes etc. have been carried out in the past few months in the state of Tamil Nadu. The customs, police department and the state enforcement agencies, in the last couple of months, have taken actions in Tamil Nadu against those dealing in smuggled cigarettes and other illegal products. As per the reports, Indonesian cigarettes (Gudang Garam) worth 9 crore were seized in Chennai from the port in the month of February 2018. Apart from the major cities such as Chennai, Coimbatore, and Madurai, raids were also carried out in other small towns.
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. Illicit trade is internationally known to result in increased criminal activities with its trade falling in the hands of criminal organizations including terrorist groups.
According to FICCI’s recent report, ‘Illicit trade: Fueling Terror Financing and Organised 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 organisations are manufacturing counterfeit goods and smuggling them across borders to f