According to a recent study released by FICCI, the illicit trade related to tobacco has led to a loss of Rs. 9,139 crore to the exchequer. Several other losses due to illicit trade of mobile phones at Rs. 6,705 crore and alcoholic beverages at Rs. 6,309 crore have also been bored by the exchequer.
FICCI has also established a strong relationship between high taxes and availability of illicit products in its study.
In the report, titled ‘Combating Counterfeiting and Smuggling – An Imperative to Accelerate Economic Development for the period 2014-15, FICCI has stated high tax rates creates demand for cheap and counterfeit substitutes. Those involved in illicit markets come out and supply reduced versions of the original product at lower prices.
The report has also stated that Gujarat has always been a hot spot for counterfeiters due to factors like having a vast coastline and bordering with Pakistan and has seen a lot of seizures in the past few months of smuggled goods such as gold, cigarettes etc.
During a seminar in Ahmedabad where this report was launched, Ashish Bhatia, Director General of Police, CID (Crime and Railways), Gujarat said that, “In the last six months, we have made large number of seizures worth more than Rs 5.2 crore of products like watches, mobile accessories, clothing, cigarettes and shoes. Much emphasis is required in seizing huge smuggled cigarettes floating in the market along with other products such as software, automobile parts, pharmaceuticals,”
Many important topics like hazards of counterfeiting, the importance of awareness and the need for effective enforcement were discussed during the seminar. The report also states that the smugglers are now switching over to low-risk and high-profit goods like cigarettes and fabric/silk yarn.
India really needs an effective strategy to tackle the problem of counterfeiting. This is not the first time; the country has incurred such huge losses due to counterfeiting. The past reports have too indicated the same.