PMI Reinforces its Commitment to Eradicate Illicit Tobacco Trade in India

Reinforcing its commitment towards illicit tobacco trade prevention, Philip Morris International’s (PMI) India affiliate, IPM India emphasized the need for government-to-government collaboration & sharing intelligence on transnational networks to stop illicit tobacco trade, at a recently concluded industry event.

India has witnessed a significant rise in illicit tobacco trade in recent years which is anticipated to grow significantly. 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. With an estimated 120 million smokers in India, India is the fourth largest and fastest growing illegal cigarette capital in the world with smuggled cigarettes accounting for a quarter of the domestic cigarette industry. According to TII illegal cigarette trade comprised of internationally smuggled and locally manufactured tax-evaded cigarettes. Threat to India’s interest through the illicit cigarette market is USD 2.7 billion causing tax loss of USD 1.6 billion and a job loss of 12000+ in 2019-2020. The value of seizures of illegal cigarettes is USD 11.2 million in 2021-2022. The lack of proper enforcement at export and import, and no effective customs recordal systems in place in countries such as Malaysia, Cambodia, and Indonesia act as an enabler to the counterfeit trade in India.

On the need for collaborated effort to tackle illegal tobacco trade in India, Navaneel Kar, Managing Director, IPM India said, “Smuggling routes for counterfeit and contraband products exist worldwide, making this issue not merely a domestic but a transnational problem that demands a transnational solution. As per intelligence reports, India is recognized as an origin, transshipment, and destination country for the flow of illegal cigarettes. International collaboration is essential to combat illicit tobacco trade, alongside stringent regulation & enforcement. As part of our continued commitment to safeguard India's economic interest & protect consumers, PMI has devised a strategy focusing on five critical areas including research & intelligence, protecting supply chain, partnerships, cooperation with law enforcement and raising awareness. Promoting harmonization of existing gold standard regulations around ASEAN, supported by implementing rules, including the law enforcement agency that has jurisdiction and the related penalties is crucial to countering illicit trade.”

Expressing concern over the rise of illicit tobacco trade, at a recently concluded industry event, Anushree Lakshminarayanan, Director External Affairs, IPM India said, “Eliminating the illicit tobacco trade has been a long-standing priority for us. We focus our efforts on securing our supply chain and protecting our products. And we do it by leveraging technology and innovation for the better: from multiple applications of authentication and security technologies to track and trace our products across the supply chain, to the use of machine learning to identify and prevent illegal online sales, technology is helping us detect and address illicit trade. However, no one can fight illicit trade on their own. Public-private partnerships based on an inclusive, common-sense approach by governments, the private sector, and civil society are vital to helping combat the practice. We are grateful to the Indian government and Indian law enforcement for prioritizing strict action on strict action on illicit tobacco trade.”

A holistic approach that complements tough penalties and strong law enforcement with awareness and education campaigns about the real-life impact of illicit tobacco trade, a predictable fiscal and regulatory environment where adult smokers are not being driven to the black market, and coordinated and committed public-private partnerships are vital to eradicate illicit tobacco trade.