'Besides inflicting financial harm on govt revenues, smuggling also undermines stability of economy'

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IANS | 22 Jun, 2023
Navneet Mohan Kothari, Managing Director of the Madhya Pradesh Industrial Development Corporation, said here on Wednesday that smuggling not only inflicts considerable financial harm on government revenues but also undermines the stability of the economy

He said that society in the past has glamorised smuggling, with some individuals avoiding tax payments and utilising smuggled money for illicit purposes.

"It is imperative to foster awareness about the inherent perils and risks connected with smuggling," Kothari said while addressing the FICCI CASCADE's (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) seminar on 'Preventive Strategies to Combat Counterfeiting and Smuggling'.

"Counterfeiting poses a deeper problem, particularly in the realm of mass consumer products like FMCG where an alarming 25-30 per cent of goods are found to be counterfeit. The money derived from smuggling is employed for illicit and nefarious purposes. The prevalence of packaged products has made counterfeiting easier, allowing counterfeiters to evade quality standards. Smuggling also serves as a source of financial support for activities that are detrimental to national interests," he added.

Mahesh Kumar Yadav, Senior Deputy Commissioner, Central GST and Central Excise said, "Crimes relating to smuggling and counterfeiting have increased manifold in the global market as a result of which the government, businesses, society and consumers are losing millions of rupees. Smugglers are opportunistic who aims to exploit market in order to gain economic advantages."

Shiyas A., DIG(I), CID, PHQ, Bhopal said, "The clandestine nature of smuggling operations allows perpetrators to evade taxes, tariffs, and customs duties, resulting in substantial revenue losses for governments. Smuggling inflicts economic losses, and there is a deficiency in adequate penal provisions to address the issue effectively."

Speaking on the topic 'Outlining the landscape of illicit trade practices - Analysis & Implications', P.C. Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Indirect Taxes and Customs (CBIC), said, "Illegal trade leads to several detrimental effects on the economy, environment, and public health and safety. Today, India is witnessing a worrying surge of this unlawful, yet lucrative activity, as there are minimal risks involved. Counterfeit and smuggled goods are flooding the market resulting in a disastrous impact on India's economic progress. As India assumes the G20 Presidency, it becomes crucial to eliminate this menace completely, ensuring a fresh start for the nation's growth and development."

Deep Chand, Advisor, FICCI CASCADE and former Special Commissioner of Police, New Delhi said, "The Madhya Pradesh government and the enforcement agencies have done remarkable work in addressing the menace of illicit trade. Their systematic approach and alertness have led to the seizure of a large number of illegal cigarettes, liquor, synthetic milk, fake currency and much more. I am hopeful that they will continue the relentless efforts to arrest the growth of illicit trade and support our fight against it."

The other panellists included Kunal Giani, Convener, FICCI MP Panel on Trade Promotion and MD, Sarvafoam; R.S. Goswami, President, FMPCCI, Bhopal; Rajeev Agrawal, Convener FICCI MP Panel on MSME and Giribala Singh, President District Consumer Disputes Redressal Commission.

The seminar aimed to highlight the adverse impact of counterfeiting and smuggling on the economy and suggest concerted measures to tackle the menace.

The day-long sessions saw experts throw light on various facets of counterfeiting and smuggling and voice their opinions on ways to curb it.

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 the illicit market in these 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 three-fourth of the total illicit value of goods in five key industries.