The industry body FICCI has demanded tough penalties and increased monitoring to combat the illegal trade, which is estimated to cost five major industries, including clothing and textiles, US $ 95,329 million annually.
The Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) in association with the Thought Arbitrage Research Institute (TARI), launched a report Consuming The Illicit: How Changing Factors of Consumption Affect Illegal Markets in 5 Key Industries which states that illicit trade in the textile and apparel category was valued at US $ 48,268 million in FY ’23, a 29.67 per cent increase from US $ 37,165 million in 2017–18.
Rajiv Talwar, Special Secretary to the Government of India and Member (Compliance Management), Central Board of Indirect Taxes and Customs (CBIC), said that in the past 15 months, the CBIC, which combats smuggling and counterfeit goods, has arrested over 3,000 persons and recovered foreign commodities valued at US $ 4.78 million.
In rural India, the illicit market for these categories —FMCG (packaged goods), FMGC (personal and household care), alcohol, tobacco and textiles & apparel— has grown more quickly, particularly among the expanding middle-class and lower-class populations.
Rising disposable incomes and a shifting spending pattern show that consumers are choosing higher-taxed goods, including ready-made clothing, which has a 12–18 per cent tax rate. This gives criminal players the chance to profit from arbitrage.
