Illicit trade adversely affecting Indian consumers

Illicit trade adversely affecting Indian consumers

New Delhi: Illicit products are adversely affecting Indian consumers and there is an urgent need to increase consumer awareness. The total estimated loss to the industry is Rs 1,05,381 crores, an increase of 44.4% . This was emphasized by FICCI-CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy), an industry body working on addressing the issue of illicit trade activities in the country.

In order to raise awareness among consumers, lawmakers and enforcement agencies, as part of its nation-wide campaign FICCI-CASCADE, organized a seminar in Hyderabad today on the theme of ‘Combating Counterfeiting and Smuggling – An Imperative to Accelerate Economic Development’.

There are slew of activities lined up for the year, including seminars, youth and consumer sensitization programs, capacity building of enforcement officials in different states including Maharashtra, West Bengal, Kerala, Tamil Nadu, Delhi, Karnataka, Jammu & Kashmir among others.

Illicit trade is a major and growing problem worldwide, including counterfeiting, smuggling or tax evasion. The market for contraband and smuggled goods is thriving in India and also becoming one of the biggest challenges faced by the Indian industry and Government.

FICCI-CASCADE reports estimate that, in India, the total loss to the government on account of illicit markets in just seven manufacturing sectors is Rs 39,239 crores. Amongst the various sectors, the maximum revenue loss to the exchequer on account of counterfeiting and illicit trade is attributed to tobacco products (Rs. 9139 crores) followed by mobile phones (Rs 6705 crore) and alcoholic beverages (Rs 6309 crore).

The report further mentions that nearly 20% of accidents on Indian roads are caused by counterfeit auto-products. Further in the FMCG sector, 30% goods sold are fake and 80% consumers believe that they are using genuine products. 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 in illegal trade in the country.

According to FICCI’s report – ‘Invisible Enemy – A Threat to Our National Interests’ – focusing on the negative impact of contraband goods on the Indian economy and businesses, the perpetrators are now switching over to cigarettes and fabric/silk yarn as they are low-risk, high-reward goods.

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 recent FICCI report, ‘Illicit trade: Fueling Terror Financing and Organized Crime’, counterfeiting is the second largest source of income for criminal activities such as terrorism, globally. 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%.