30^th July 2024

Venue : ITC Windsor, Bengaluru, Karnataka

Smuggling and illegal trade represent multifaceted global challenges that jeopardize social welfare, disrupt legitimate economic activities, and erode government revenues. These operations increasingly utilize sophisticated technologies and vast international supply chains to avoid detection, channelling funds to criminal organizations and terrorist organisations, thereby threatening national security. In response to this growing hazard, FICCI CASCADE hosted a seminar on July 30, 2024, titled “Combatting Illicit Trade: Insights, Challenges, and Solutions,” to discuss these concerns and develop collaboration against this global challenge. The seminar included broad involvement from government authorities, corporate executives, law enforcement agencies, and civil society, fostering a thorough discussion on this topic. While many opinions were offered, the major focus remained on developing effective methods to tackle this expanding threat.

Ms. Gunjan Krishna, Commissioner for Industrial Development & Director for Industries and Commerce, Government of Karnataka emphasized the severe threats posed by smuggling and counterfeiting to global security and economic growth. She highlighted the alarming proliferation of counterfeit products, including pharmaceuticals and consumer goods, which finance terrorist groups and endanger public health and safety. She cited WHO statistics indicating that one in ten medicines in low- and middle-income countries is substandard. “Karnataka is taking decisive action by supporting 43 GI-tagged products and working closely with law enforcement to combat illicit trade. Our commitment to preserving traditional crafts and ensuring access to genuine, quality goods is crucial for safeguarding our economy, health, and security.”

“Grassroots communities and local leaders’ involvement are crucial in raising awareness about the impacts of illicit trade,” said Ms. Prabha Rao, Executive Director of the South Asian Institute for Strategic Affairs. Ms. Rao discussed the detrimental impact of counterfeiting and smuggling on legitimate businesses, government revenues, heritage, and artisans’ livelihoods. She highlighted the importance of involving local communities in combating these illicit practices and stressed the need for raising awareness about their economic, health, and societal impacts.

Mr. P.C. Jha, Advisor to FICCI CASCADE and Former Chairman of the Central Board of Indirect Taxes and Customs (CBIC) said “Combating illicit trade is essential for India to achieve its goal of becoming a $5 trillion economy.” Mr. Jha stressed the significant threat that illicit trade poses to economic stability and development. He emphasized that addressing these activities is crucial for achieving economic goals and called for enhanced efforts to counteract these threats.

Mr. Deep Chand, Advisor to FICCI CASCADE and Former Special Commissioner of Police, New Delhi, said “Recent successful interventions by Karnataka’s enforcement agencies highlight the ongoing threat of illicit trade.” Mr. Chand highlighted Karnataka’s enforcement agencies’ recent successes, particularly Bengaluru Customs officials who seized 2.57 kg of gold worth Rs. 1.68 crore at Kempegowda International Airport, disrupting a major smuggling network. He highlighted the state’s diverse illicit trade, which spans several sectors, including gold, red sanders, drugs, and endangered wildlife. A notable example of the state’s efforts to combat this issue involved the interception of a consignment containing endangered species. This case underscores the ongoing challenges in curbing illegal activities that exploit both natural resources and vulnerable ecosystems.

Emphasizing collaboration, Mr. Chand praised the proactive measures of various enforcement agencies and noted that their success depends on effective coordination and intelligence sharing. He highlighted the importance of advanced technologies, such as data analytics and surveillance systems, in enhancing their capabilities, concluding that “leveraging technology and international partnerships is crucial to staying ahead of sophisticated smuggling networks.”

“A united front is essential for combating illicit trade effectively,” stated Dr. Kotraswamy M, Commissioner, Bengaluru North CGST Commissionerate. Dr. Kotraswamy highlighted the need for collaboration between central agencies, state enforcement bodies, and civil society. He stressed the importance of coordinated efforts to address this complex issue.
“Illicit trade undermines society by causing job losses, threatening social security, and funding terrorism. Awareness is crucial to combat the far-reaching effects of smuggled & counterfeit goods on our communities,” remarked Ms. Kameswari Subramanian, Former Chief Commissioner of Central Excise, Customs and Service Tax, Bangalore Zone & International Expert, Customs Law, Procedures & Trade facilitation.

Ms. Jyothi VK, General Counsel & Sr VP, Aditya Birla Fashion and Retail Ltd said that ‘Illicit trade is crippling brand legacy. People are copying successful brands, selling them at lower prices, and causing a crisis for our brand owners. We urgently need to find effective ways to protect brands and safeguard reputation.”

Mr. Prem Mahadevan, Senior Analyst, Global Initiative against Transnational Organized Crime, highlighted the dual challenge that law enforcement agencies face in combating illicit trade. On one front, they are working to dismantle the networks of producers who create counterfeit goods. On the other, they must address the demand side by educating and engaging with consumers who may not realize they are purchasing counterfeit products. This two-front war requires a comprehensive approach that not only targets the supply chain but also raises awareness among consumers about the implications of their purchasing choices.

Mr. Gunjan Arya, IPS, Deputy Director, Security, State Intelligence, Bengaluru emphasized the alarming scale of the spurious cigarette trade, noting that illicit manufacturers often operate from makeshift setups, such as residential flats. This not only highlights the sophistication of these illegal operations but also raises serious public health concerns, as the production of counterfeit cigarettes poses significant risks to consumers’ lives.

Mr. Kalyanam Rajesh Rama Rao, Additional Commissioner, Customs, warns that while illicit trade may seem innocuous, it is intricately linked to a broader criminal network that severely undermines global economies and societies. This highlights the urgent need for awareness and action to combat the far-reaching effects of such illegal activities.

Mr. Siddhartha Agarwal, Co-chair, FICCI Karnataka State Council highlighted the shocking growth of illicit trade, which surged from $650 billion to $3 trillion in just ten years. This dramatic increase, now representing 10% of global trade, poses serious threats to economic stability and security, emphasizing the need for urgent action to address this escalating issue.

The seminar was attended by over 100 participants, providing valuable insights into the complex challenges posed by illegal activities. The seminar highlighted the urgent need for collaborative efforts to tackle this issue and protect both our economy and environment.