Tobacco Industry: Illegal trade in tobacco and cigarette smuggling is not only a major problem but also a growing headache worldwide.
Illicit Trade in tobacco products has become a major problem for the world. In this, it has come to light that India ranks third in the smuggling of cigarettes. Interestingly, due to the smuggling of these cigarettes, the revenue of the Indian government has been lost to the tune of Rs. 13,331 crores. This revenue loss has increased by 46 percent compared to the last twelve years. So it has become a matter of concern for India.
According to the 2023 report of ‘Euromonitor International’, compared to 2022, the quantity of illegal cigarettes in India has reached 30.2 billion cigarettes. China and Brazil rank before India in the smuggling of these cigarettes. After these countries, India is at the third position. According to reports, the Indian government lost Rs 13,331 crore in revenue in 2022 due to illegal tobacco trade. This is an increase of 46 percent compared to 6,240 in 2012. IPM India, the Indian affiliate of Philip Morris International (PMI), has highlighted the need to eradicate the illicit tobacco trade.
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Illegal tobacco trade is a big problem. But at the same time, it has become a growing headache for the whole world. Illegal tobacco trade has been on the rise in India for the last few years and this figure is increasing continuously. According to the 2022 FICCI Cascade Study, the illicit cigarette trade in India is worth Rs 22,930 crore. According to these figures, the revenue of the Indian government in 2022 due to the illegal trade in tobacco has been lost to Rs 13,331 crore, which is 46 percent more than the 2012 figures of Rs 6,240 crore. According to a Tobacco Institute of India (TII) report, cigarettes smuggled internationally and manufactured in India but tax evaded account for nearly a quarter of India’s total cigarette market.
Seizures and Crackdowns
According to the recently prepared report for 2023-2024, the police have seized stocks of illegal cigarettes from various cities. In Guwahati, customs officials and railway officials along with Assam Rifles have seized 11 lakh cigarettes in various raids. Customs officials along with Visakhapatnam police seized 21 lakh cigarettes in Vijayawada. At that time, 103 lakh cigarettes were found in 75 boxes. Hyderabad police seized 4.5 lakh cigarettes, which were smuggled into India in 267 boxes. At the same time, 2.12 lakh cigarettes were seized by Lucknow customs officials.
Not only this, Customs, Police and DRI also took massive action in Calicut Airport, Faridabad, Amritsar and Indore. More than 85 lakh cigarettes were seized by DRI from Pune and Silchar, Raipur, Surat and Ahmedabad. According to a 2023 report by Euromonitor International, the number of illicit cigarettes in India stood at 30.2 billion cigarettes, a figure below that of China and Brazil.
Global Implications
Cigarette smuggling has become a growing problem globally. According to KPMG’s 2022 report, cigarette smuggling has increased in the European Union, UK, Norway, Switzerland, Moldova and Ukraine. In the European Union alone, 35.8 billion illegal cigarettes have been consumed, causing a loss of approximately 11.3 billion euros to the government there, which is 8.5 percent more than in 2021. The highest 61.5 percent of cigarettes were consumed only in France.
The Road Ahead
Expressing concern over the rapidly growing illicit tobacco trade, Navneel Kar, Managing Director, IPM India said, “Restricting the illegal trade of cigarettes has become a long-term issue for us. Globally, PMI has tried to prevent the illegal trade of cigarettes through 5 important methods. This includes research, supply chain security, partnerships with law enforcement agencies and an emphasis on creating awareness. We always work with law enforcement agencies to conduct forensic examinations of seized products. At the same time, we tries to curb the black market by checking counterfeit products and passing them on to intelligence agencies.”
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In India, we have invested in the same work, training law enforcement agencies to inform them about the counterfeit tobacco trade. The fight against trafficking is made easier by private-public partnerships and a holistic approach by the private sector and society, including the government.
Counterfeit products need to be detected and monitored with integrated methods and sophisticated equipment such as digitally verified track and trace systems, holograms, QR codes and RFID tags. As India becomes a global economic powerhouse, it is necessary for India to focus on securing its future by keeping an eye on the trade in counterfeit products,” added Navneel Kar.
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