The Cost of Contraband in India Revealed

Source from:  worldtobacco.co.uk 02 May 2008 05/05/2008

Contraband cigarettes sales are estimated at Rs1,700 crore ($425m) in India and are posing a threat to the livelihood of five million tobacco farmers in the country according to a study 'Combating Counterfeiting - Brand Protection', commissioned by the Associated Chambers of Commerce and Industry of India. The report also "attributed high taxes on domestic cigarettes, the main reason for increased demand for smuggled cigarettes. As a result, the revenue losses to the exchequer is estimated to be at around Rs2,000 crore ($500m). It also aggravates under-utilisation of domestic capacity and affects farmers by eroding demand for local tobacco. Increasingly large volumes of such cigarettes coming from across the borders will gradually kill the domestic industry and, consequently, severely affect the livelihood of the 5m tobacco farmers, mainly in Andhra Pradesh and Karnataka." To protect legitimate brands and the users of the products, President Venugopal N Dhoot recommended "a separate classification on economic offences in the Criminal Procedure Code (CPC) along with a separate Chapter to handle economic offences, including the one dealing with counterfeit, fake, spurious and contraband products. He added there was "a need for amending the Indian Panel Code 1860 to make it mandatory for the police to submit reports of the raids within a month of their being conducted is underlined in the study. The Code should provide for a central system of monitoring the follow-up of such police actions." Enditem