Crime Alert

The money generated by smuggling the smoke is also used by organised crime syndicates and terrorists

Manish Pachouly

MUMBAI: Smoking is injurious to health. This warning sign is present in all legitimately manufactured and sold cigarette packets. But do you know certain kinds of cigarettes are bad for the health of the country’s economy as well as may be an instrument in financing organised crime syndicates and sometimes terrorism?

The money you put into buying cigarette packets having no statutory warning comes via the smuggling route with the proceeds ultimately benefitting the unscrupulous elements. As per statistics, about one-fourth of smokers smoke cigarettes that enter illegally into the country. The reason behind this is the cost, as these smuggled packets are cheaper than the legitimate ones.

According to the 2021-22 ‘Smuggling in India’ report by the Directorate of Revenue Intelligence (DRI), among the illicit and smuggled goods, cigarettes have emerged as the most lucrative sin product, witnessing the highest jump in the recent past.

Besides, as per Euromonitor International, India is the fourth largest illicit cigarette market in the world. Statistics show that illegal cigarettes had grown by 37 percent increasing from 19.5 billion sticks in 2011 to 26.8 billion sticks in 2021.

Startling figures by Euromonitor International show that the illicit cigarette volume in India peaked in 2020, reaching a level of 28.1 billion sticks and representing as much as 38 percent of legal volume.

According to the DRI report, the agency seized 11 crore cigarette sticks worth Rs 93.32 crore in 2021-22. The reason behind the rampant and increasing smuggling of cigarettes is the high tax arbitrage. Legitimate cigarettes cost about 50 percent more than illegitimate ones. Besides the smuggled cigarettes do not carry the warning which as per law is mandatory to display on 85 percent of the packaging area.

The report also states that the smugglers have utilised all possible modes of shipments like courier consignments, land borders, sea cargo, and by air. Moreover, most of the cigarettes seized by the DRI were shipped from countries such as UAE, Myanmar, Indonesia, and China.

Cigarette smuggling further causes a huge revenue loss to the government. It is pegged at around Rs 15,500 crore per annum. A report published by ‘The Tobacco Institute of India’ says that in recent years, the availability of illegal cigarettes has spread across urban as well as rural markets. In metros they are almost universally available, the report says.

The report further states that smuggled cigarettes are particularly popular among youths as they carry international brand names and are cheaper than Indian brands.

Talking about the link between cigarette smuggling and criminal activities, the report says that the illegal trade in cigarettes in India, like the rest of the world, is controlled by anti-social, criminal elements in society. “Growth in illegal trade implies availability of more funds with these elements to execute their unlawful activities against society,” the report says.

It adds that internationally, it has been determined, for example by the US Department of Homeland Security, that profits from cigarette smuggling have been used to fund criminal and terrorist activities posing a huge threat to national security.

Further, a report by the Centre for Public Integrity titled ‘Tobacco Underground: The Global Trade in Smuggled Cigarettes’ says that terror outfits including the likes of Taliban and Al-Qaeda are actively involved in smuggling cigarettes.

Dr. Sujay Kantawala, senior lawyer and an expert in Customs and DRI cases said that cigarette smuggling of various types of brands is on the rise as the tax is very high and there is a huge black market. “The outlets for its distribution are lakhs of panwalas, etc,” he said adding, “The entire money that moves around through cigarette smuggling and local sale is in total cash.” “ Also, even children are buying cigarettes. Apart from this being the sales proceeds of criminal activity, this has a really huge impact on the health of society. These are danger signals that we can’t ignore,” he concluded.