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Imperative to prioritize education, awareness initiatives to highlight detrimental consequences of counterfeiting, smuggling: Kerala Commerce & Industry Minister

May 20, 2023

Government suffers tax loss of Rs 58,521 crore due to illicit trade in five key Indian Industries - FICCI CASCADE Report 

In 2022-23, Kerala customs seized 630 kg of gold, worth Rs. 311 crores and filed 123 cases of smuggled cigarettes, worth Rs. 329 lakh

KOCHI, 20 May 2023: Mr P Rajeeve, Minister of Commerce and Industry, Government of Kerala today said, "The problem of counterfeiting and smuggling represent a colossal global issue that exerts its influence across virtually all industry sectors on a worldwide scale. It erodes the lawful competitive advantage held by rightful owners, impeding innovation, employment opportunities, and the sustainable economic growth of the nation."

Addressing the FICCI CASCADE's (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) program on 'Preventive Strategies to Combat Counterfeiting and Smuggling' Mr Rajeeve stated that it is important for consumers to comprehend the complexities of this problem. The youth, as the consumers of tomorrow, possess the power to inspire and drive the necessary change through their choices and behaviours. In order to combat this global scourge, it is imperative to prioritize education and awareness initiatives that shed light on the detrimental consequences of counterfeiting and smuggling.

Mr K Sethu Raman, IGP & Commissioner of Police, Police Commissionerate, Kochi City said, "There has been a significant shift in smuggling and counterfeiting practices over the past decade, largely due to the rise of the digital economy. This transformation has posed a considerable challenge for police investigations, as it has led to an increase in cyber fraud incidents. Each month, hundreds of complaints related to such crimes are being reported. Furthermore, the advancements in technology have given rise to new types of financial products, such as bitcoin and cryptocurrencies."

Mr Rajendra Kumar, Customs Preventive Commissioner, Kochi said, "Customs plays a pivotal role in upholding border control, acquiring intelligence, performing risk assessments, fostering stakeholder collaboration, and enhancing public awareness as part of its mission to effectively combat smuggling and counterfeiting. In the year 2022-23, Kerala customs successfully handled 810 cases, leading to the seizure of a significant quantity of 630 kg of gold, with an estimated value of 311 crores. Additionally, Kerala customs also filed 123 cases of smuggled cigarettes, worth Rs. 329 lakh.

Speaking on the topic 'Outlining the landscape of illicit trade practices - Analysis & Implications', Mr PC Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Indirect Taxes and Customs (CBIC), said, "Illicit trade is draining out the economy, ruining the environment, and causing serious health and safety concerns. Unfortunately, we are witnessing a surge in this criminal activity owing to high profits and low risks. It is ushering in a worrying trend of counterfeits and smuggled products in the market that could have grave repercussions on India's economic growth. As the country takes on the G20 Presidency, it is imperative that this menace is eradicated from its roots so that a new India can emerge."   

Mr Deep Chand, Advisor, FICCI CASCADE and Former Special Commissioner of Police, New Delhi, said, "Smuggling and counterfeiting are a major threat to the economy and is a hindrance for a globalized world. The efforts of Kerala in this regard are applaudable. It has been effectively dealing with the challenge through policies targeted at curbing counterfeiting and smuggling. The enforcement department of the state has also been credited for taking quick action in resolving the problem and seizing illegal products. However, to get to the root of the problem, widespread consumer awareness is required and the public needs to be sensitized on the gravity of the situation."  

The other eminent panelists included Mr Bibu Punnooran, Chair, FICCI Health Care Sub Committee and Director, Medivision Scan & Diagnostic Research Centre Pvt Ltd, Adv. Vizzy George, High Court of Kerala, Mr Gopa Kumar, Chief Operating Officer, Bhima Jewellers, Mr Antony Kottaram, Managing Partner, Kottaram Business Corporation and Mr Saji MV, CEO, TecQ.

The Minister also felicitated students for the inter-school competition organized yesterday by FICCI CASCADE on the theme 'Role of Youth in Making India Free from Smuggling & Counterfeiting'. The competition witnessed enthusiastic participation of over 150 students from various educational institutions of Kochi. The list of the awardees are as follows:

 

Winners

Speech Competition

Painting Competition

Jingle Writing Competition

1st Prize

Jishnu Dhananjai

Vasudev K

Aishwarya K

2nd Prize

Neelima M

Arya Menon

Niya Wilson

3rd Prize

Abhinav Nair

Gouri

Roopshika Rupesh

 

The aim of the seminar was to highlight the adverse impact of counterfeiting and smuggling on the economy and suggest concerted measures to tackle the menace. FICCI CASCADE's seminar aimed at drawing attention to this vexatious problem. The day long sessions saw experts throw light on various facets of counterfeiting and smuggling, and voice their opinions on ways to curb it.

According to a recently released FICCI report, the Indian exchequer suffered a tax loss of Rs 58,521 crore in 2022 due to illicit trade in five key industries. This amounts to a significant burden on the country and its growth aspirations. Illegal trading not only causes serious economic losses, but also involves serious health and safety hazards that could lead to disastrous effects on society.

Owing to its long coastline and existing port connectivity, Kerala has long been a victim of illicit trade, for a wide array of products such as drugs, tobacco, gold, etc. 

The market for contraband and smuggled goods is thriving in India and is today one of the biggest challenges faced by Indian industry. The country is witnessing widespread smuggling in various product categories such as gold, cigarettes, cosmetics, medicines, jewelry, readymade garments, alcohol, capital goods and consumer electronics, which is severely hurting the country's economy.

FICCI has set up a committee CASCADE, with the participation of leading industries from all sectors of the economy to raise awareness against this issue and work with government and other agencies to fight the menace. The seminar also deliberated on FICCI CASCADE's recent report titled Illicit Markets: A Threat to Our National Interests, which examines the impact of illicit trade in five key industries in India - Mobile Phones, FMCG-Household and Personal Goods, FMCG-Packaged Foods, Tobacco Products, and Alcoholic Beverages.  According to the report, the size of illicit market in the above-mentioned industries was Rs 2,60,094 crore for the year 2019-20, with the FMCG industry - household and personal goods, and packaged foods - together accounting for 3/4th of the total illicit value of goods in five key industries.

Illicit Market Size

Industry

Value (Rs In Crores)

Mobile Phones

15,884

FMCG - Household & Personal Goods

55,530

FMCG - Packaged Foods

1,42,284

Tobacco Products

22,930

Alcoholic Beverages

23,466

 

Tax Loss

Industry

Value (Rs In Crores)

Mobile Phones

2,859

FMCG - Household & Personal Goods

9,995

FMCG - Packaged Foods

17,074

Tobacco Products

13,331

Alcoholic Beverages

15,262

 

 

 

 

 

 

 

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