Smuggling networks getting attracted to India amid economic growth, says top Customs official

Ahmedabad, June 30 (PTI) India is becoming an attractive target of sophisticated networks smuggling narcotics, gold, and liquor owing to its economic growth, a top Customs official said on Monday while noting a surge in attempts to move goods across borders illegally.

Addressing a seminar organised by FICCI here, Chief Commissioner of Customs of Ahmedabad Zone, Pranesh Pathak, said smuggling of narcotics and other items poses serious threats to national security, public health, and legitimate commerce.

"As India's economy is expanding and global trade accelerating, the country has become increasingly attractive to sophisticated smuggling networks. From gold, liquor, and narcotics to cigarettes and high-end luxury watches, there is a surge in attempts to illegally move goods across our borders," Pathak said.

These activities not only evade duties but also pose serious threats to national security, public health, and legitimate commerce, FICCI stated in a release quoting Pathak who addressed FICCI CASCADE's seminar on 'Illicit Trade in Focus: State-Level Action Against Counterfeiting & Smuggling'.

Recently, Godhra Customs intercepted over 80 lakh counterfeit cigarettes and seized psychotropic substances valued at over Rs 150 crore, Pathak said, adding that luxury watches worth Rs 13 crore were also confiscated.

"These seizures are a stark reminder of the evolving strategies and boldness of illicit trade networks targeting our economy. Indian Customs has significantly intensified its vigilance and enforcement operations across land, air, and sea routes. We remain fully committed to protecting our borders, curbing illicit trade," he said.

FICCI's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) in its comprehensive 2024 report titled 'Consuming The Illicit: How Changing Factors of Consumption Affect Illegal Markets in 5 Key Industries', estimates the size of the illicit market in India at Rs 7,97,726 crore in 2022-23.

The five sectors most affected are FMCG (packaged foods), FMCG (personal and household care), alcohol, tobacco, and textiles and apparel.

According to these findings, illicit trade continues to undermine legitimate businesses, disrupt fair market competition, and substantially reduce government tax revenues, it said.

PC Jha, a former Chairman of the Central Board of Indirect Taxes and Customs (CBIC) and Advisor to FICCI- CASCADE, stated that smuggling thrives on cost arbitrage created by high indirect taxes and regulatory gaps.

"When duties on products like tobacco, liquor, and gold are significantly high, it creates strong incentives for illegal trade, undermining legitimate businesses and eroding government revenues," he told the seminar. PTI PJT NSK