IPM India Intensifies Efforts Against Illicit Tobacco Trade to Safeguard Economic Interests and Consumer Protection

Philip Morris International’s (PMI) India affiliate,IPM India, is strengthening its commitment to combating the illicit tobacco trade, aiming to safeguard India’s economic interests and protect consumers. The illicit tobacco trade poses a significant and growing threat globally, with India witnessing a sharp increase in this illegal activity in recent years. According to the 2022 FICCI Cascade study, the illegal cigarette market in India is estimated to be worth ₹22,930 crore. The reports also reveal that the Government of India faced a total loss of ₹13,331 crore in 2022 due to the illicit tobacco market, a substantial increase from ₹6,240 crore in 2012, marking a 46% rise. The Tobacco Institute of India (TII) highlights that the illegal cigarette trade, which includes internationally smuggled and locally manufactured tax-evaded cigarettes, now accounts for nearly one-fourth of the cigarette industry in India.

As per the recent reports, throughout 2023-2024, law enforcement agencies have seized illegal cigarettes across many Indian cities. In Guwahati, customs officials and railway authorities confiscated over 11 lakh sticks on multiple occasions, with the Assam Rifles also making seizures. Visakhapatnam saw the police and customs seize over 21 lakh sticks, while in Vijayawada, the tally reached over 103 lakh sticks, including 75 boxes. Hyderabad’s police force seized 267 cartons and 4.5 lakh sticks. Additionally, Lucknow’s customs officials seized over 2.12 lakh sticks and a substantial number of packs and boxes. Furthermore, Calicut Airport, Faridabad, Amritsar, and Indore experienced various seizures by customs, the police, and the DRI. Pune and Silchar, Raipur, Surat, and Ahmedabad saw the DRI seize over 85 lakh sticks.

According to Euromonitor International's 2023 report, illicit cigarette volumes in India reached 30.2 billion sticks in 2022, trailing only behind China and Brazil.

Globally, illicit trade continues to be a growing concern. KPMG 2022 annual study ‘Illicit cigarette consumption in the EU, UK, Norway, Switzerland, Moldova & Ukraine’, commissioned by Philip Morris Products SA, revealed that 35.8 billion illicit cigarettes were consumed across the EU alone, causing governments the loss of an estimated €11.3 billion in tax revenue—8.5% more than in 2021. The growth of the illicit market in the EU was partly driven by the continued rise of counterfeit consumption, which reached its highest level ever recorded. Notably, the vast majority of counterfeits (61.5%) were consumed in France.

Expressing concern over the rise of illicit tobacco trade, Navaneel Kar, Managing Director, IPM India said, “Eliminating illicit trade has been a longstanding priority for us and continues to be an integral part of our efforts to drive operational excellence and build a sustainable future. Globally, PMI's strategy to prevent illicit trade focuses on 5 critical areas- research & intelligence, protecting supply chain, partnerships, cooperation with law enforcement and raising awareness. We support and help law-enforcement agencies by inspecting and authenticating seized products and performing forensic evaluations. Additionally, profile illicit products, share intelligence on emerging routes and trends shaping the black market, and train officials on the innovative authentication and security features we use to protect our products.

In India, we are equally invested in the cause, working with law enforcement agencies to educate and raise awareness about illicit tobacco trade. Public-private partnerships based on an inclusive approach by governments, the private sector, and civil society are vital to helping combat the trade. Interconnected systems and advanced technologies such as digitally verified track-and-trace systems, holograms, QR codes, and RFID tags are essential for monitoring and detecting counterfeit products. As India progresses on its path to become a global economic powerhouse, it is critical to take stricter measures to eradicate illicit and build a safer tomorrow, he added.”