FICCI@100 : 988 days to go
Become a Member Members Zone Employee Zone
Prevention of smuggling can increase employment by up to 16.36 lakh jobs in five key industries: FICCI CASCADE Report

Jan 22, 2020

  • Indian economy loses Rs 1,17,253 crore due to smuggling in the five key sectors
  • Textiles, Tobacco Products (Cigarettes), Readymade Garments, Capital Goods (Machinery and Parts), and Consumer (Electronics) Durables are top industries impacted by smuggling
  • Total direct livelihood opportunity in these five industries is about 5.01 lakh just by effective smuggling control


CHENNAI, 22 January 2020Dr Justice S. Tamilvanan, President, Tamil Nadu State Consumer Disputes Redressal Commission, today said that as per the Consumer Protection Act, 1986 consumer rights should be protected. Smuggling and counterfeiting is affecting not only the revenue of the government but is also adversely impacting commerce and industry and the health and safety of the people.


Speaking at the seminar on 'Containing Counterfeiting and Smuggling- A Step Towards Prosperous Nation Building' organized by FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy), Dr Tamilvanan said, "This national problem can be reduced through proper laws and stringent actions, which in turn will lead to a prosperous nation building. Effective enforcement, special courts and tribunals, proper development and awareness are the pillars to curb this menace."


The seminar discussed the importance of increased awareness on the hazards of counterfeiting and smuggling, and the need for effective enforcement to enhance India's economic development.


Dr Prateep V. Philip, IPS, DGP Civil Supplies (CID), Government of Tamil Nadu said that India has a growing and burgeoning market in counterfeit and smuggled goods ranging from electronics to cosmetics, pharmaceuticals, apparels, cigarettes, footwear etc. "Increasing internet penetration of over 302 million internet users makes India the second largest online user base. Owning to the shift in customers from offline purchases to online purchases, a multi-pronged and multi layered approach across all supply chain is required to establish a universal and uniform electronic pedigree. Illicit trade is operated by criminal gangs and terrorist groups which emphasizes the importance of customs and border protection agencies in preventing and reducing this heinous crime," he said.


Ms V Kavitha Dutt, Chairperson, FICCI Tamil Nadu State Council & JMD, The KCP Ltd. in her welcome address highlighted that counterfeiting and smuggling adversely impacts industries, consumers, government and economy. "Illicit trade has a serious decelerating effect on growth which must be curbed substantially. Consumers must be emphasized on taking a bill on every purchase for making India a tax complaint nation and encouraging citizens to be a part of progressive nation building," he added.


Mr P C Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Excise and Customs, stated "During the last twenty years, the volume of the counterfeiting activity globally has increased 100 times and the size of trade in counterfeited goods is 10% of the legal international trade (around 2% of the world���s overall economic output). The problem of illicit trade is much more serious than it is commonly perceived."


As per FICCI CASCADE report, the total loss to the industry on account of illicit markets in just seven manufacturing sectors is about Rs. 105,381 crores and the total loss to the government is Rs 39,239 crores. Amongst the various sectors, the maximum revenue loss to the exchequer is attributed to tobacco products, estimating a revenue loss of Rs. 9139 crores followed by mobile phones at Rs 6705 crores and alcoholic beverages at Rs 6309 crores.


FICCI CASCADE's recent study titled- 'Invisible Enemy: Impact of Smuggling on Indian Economy and Employment' quantitatively estimates both revenue and employment opportunity lost due to smuggling in five specific industries. According to the report the total direct employment opportunity lost in Textiles, Cigarettes, Readymade Garments, Capital Goods and Consumer Electronics is about 5.01 lakh in 2017-18. 3.55 lakh employment opportunity lost is in readymade garments and tobacco products, being largely labour-intensive industries. While, the total employment opportunity lost in the economy is about 16.36 lakh in 2017-18 due to backward linkage and multiplier effects of these five industries. The Indian economy loses Rs 1,17,253 crore due to smuggling in these five sectors. Another FICCI report titled 'Illicit trade: Fueling Terror Financing and Organized Crime' 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 per cent.  


During the programme panel discussions on Organized Crime Surge in India - Role of Enforcement Agencies in Combating Smuggling and Counterfeiting and Role of Government and Industry to Fight Against Smuggled & Fake Products and Ensuring Consumer Protection were also held which were addressed by representative by leading industries, law firms and senior officers from the police, customs and DRI and chaired by Ms Kameswari Subramanian, International Expert, Customs Law, Procedures & Trade facilitation and Think Tank Member, FICCI CASCADE and Mr Deep Chand, Advisor, FICCI CASCADE and Former Special Commissioner of Police, New Delhi. Ms P Suriya Prabha, Director of Programs, Transnational Alliance to Combat Illicit Trade (TRACIT) shared the international best practices in combating illicit trade and Mr P Sridharan, Head, FICCI Tamil Nadu State Council also shared their perspective.


Several steps are being taken by FICCI CASCADE and the government to create large-scale awareness among the most impacted segment of this menace: the consumer. The seminar has been organised in a series of such events to be organised across the country as part of a nation-wide awareness campaign to highlight the issue and focus on the growing menace of illegal trade. The event was attended by more than 100 industry captains, representative from consumer forums, government officials and stakeholders in this segment.

Also Read