Smuggled, counterfeit goods result in Rs. 1,05,381 cr loss in 7 sectors
SME Times , May 16, 2017
Due to smuggled and counterfeit goods the estimated loss to the industry in just 7 industry sectors is Rs 1,05,381 crores, an increase of 44.4 percent between 2011-12 to 2013-14, apex industry body FICCI said in a report.
FICCI has a dedicated body Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) – a unique forum addressing the problem of growing illicit trade in counterfeits, pass offs and smuggled goods in India. As per FICCI CASCADE reports, the estimated loss to the industry in just 7 industry sectors is Rs 1,05,381 crores, an increase of 44.4 percent between 2011-12 to 2013-14.
According to FICCI's recent report – 'Invisible Enemy – A Threat to Our National Interests' – focusing on the negative impact of smuggled goods on the Indian economy and businesses, the smugglers are now switching over to cigarettes and fabric/silk yarn as they are low-risk, high-reward goods.
As per the report, in the last one year, the DRI seizures of smuggled cigarettes has increased by 78 percent (from Rs. 90.75 crores in 2014-15 to Rs. 162 crore in 2015-16) followed by fabric/silk yarn, where the increase is by 73 percent (from Rs. 24.03 crores in 2014-15 to Rs. 41.78 crore in 2015-16).
The seizures of gold have witnessed an increase of 61 percent (from Rs. 692.35 crore in 2014-15 to Rs. 1119.11 crore in 2015-16). While the DRI seizures of machinery parts and electronic items has seen a decline.
It undermines the local industry, suppresses innovation and investment, discourages legal imports, reduces the volume of revenues collected from duties and levies by the government, fuels transnational crimes and hampers the health of citizens. The ill effects are felt widely across industries.
Alarmed by the pace at which such goods are growing and in order to bring adequate attention to the magnitude of the problem, FICCI has undertaken in depth research on the magnitude of the problem and shared the findings with policy makers from Ministry of Finance, Cabinet Secretariat and Prime Minister's office, urging them to take swift action to clamp down the rising illicit trade in smuggled and counterfeit goods in India.
India is one of the growth engines of the global economy and as the Indian economy grows it is faced with the challenges posed by the growth of smuggled and counterfeit goods. To deal with a problem of this extent, it is vital to highlight the enormity of the problem and take firm steps to eradicate the nation-wide menace.
Smuggling and counterfeiting severely harms the economy of a country in multidimensional ways, the FICCI CASCADE report said in a press release om Monday.