This Independence Day, IPM India, Philip Morris International’s affiliate in India, has resolved to maintain its commitment against the growing illicit tobacco trade that adversely affects the Indian economy and consumers’ health. The illicit tobacco trade as a global menace carries multifarious consequences, and India is no exception to this. A multi-pronged strategy by IPM India focused on some priority areas: research and intelligence while securing the supply chain; building partnerships; collaboration with law enforcement agencies; and generating public awareness.
The menace of the illicit tobacco trade in India has assumed gigantic proportions in recent times and is reflected in some rather alarming statistics that project the seriousness of the situation. According to a 2022 report, India’s illegal cigarette market is worth Rs 22,930 crore. The estimated loss to the Indian government due to the illicit tobacco market was ₹13,331 crore in 2022 as against ₹6,240 crore in 2012, witnessing a steep 46% increase. The Tobacco Institute of India reports that illegal cigarettes—cigarettes that do not pay the statutory duty and have practically no legal sales—are now almost a fourth of the Indian cigarette industry.
During 2023-2024, there have been major seizures of illegal cigarettes by different law enforcement agencies across the country that reflect the magnitude of the issue. Apart from this, IT officials and railway authorities confiscated more than 11 lakh sticks in Guwahati several times, while Assam Rifles also joined in the confiscations. In Visakhapatnam, more than 21 lakh sticks were seized by the police and customs officials, and in Vijayawada, the tally crossed more than 103 lakh sticks, including 75 boxes. In Hyderabad, the police force took away 267 cartons and 4.5 lakh sticks. In Lucknow, the customs department seized over 2.12 lakh sticks besides several packs and boxes. There have been further seizures at Calicut Airport, and in Faridabad, Amritsar, Indore, Pune, Silchar, Raipur, Surat, and Ahmedabad, the Directorate of Revenue Intelligence seized more than 85 lakh sticks.
According to a Euromonitor International 2023 report, illicit cigarette volumes in India touched 30.2 billion sticks in 2022, making the country one of the largest illegal cigarette markets in the world after only China and Brazil. The increase in illicit trade is not observed in the case of India alone; rather, it is a worldwide phenomenon. A 2022 KPMG study, on behalf of Philip Morris Products SA, found that 35.8 billion illicit cigarettes were consumed in the European Union, leading to a tax revenue loss of €11.3 billion—an 8.5% increase over 2021. According to the study, part of what sustained the growth of the illicit market in the EU in that period was the record levels of counterfeit cigarettes, the bulk of which were consumed in France.
These are the critical focus areas in PMI’s strategy in India addressing the fight against illicit tobacco trade. Most efforts must be focused on research and intelligence, which would assist in gaining insights into trends and routes known to shape the black market. Another sensitive area ensures the supply chain is safe from any dissipation into the illegal channel. IPM India collaborates with law enforcement agencies from time to time for support such as investigations, overviews of seized products, and forensic analysis. IPM India also plays a significant role in creating awareness among the officials through training programs covering innovative authentication and security features of products.
Internationally, profiles of illicit goods are shared by premium brands like PMI with law enforcement agencies, along with intelligence about emerging trends. IPM India has been providing extremely useful assistance to investigating agencies through forensic evaluations and training officials across India. These are just a few activities within the overall framework of generating awareness of the menace of the illicit tobacco trade and fostering public-private partnerships integral to the combat against this threat. Advanced track-and-trace systems, holograms, QR codes, and RFID tags, all of which will be digitally verified, represent invaluable border control tools for monitoring and trying to locate counterfeit products.
With this, there becomes a compelling need to tighten controls further on illicit tobacco trade as India takes its position as a global economic superpower. It’s a question of billions of dollars in financial losses and thousands of lives lost due to this illegal market, after all. Thus does the significance of the continuous endeavors PMI India has been intending in this very direction echo of its commitment toward protecting India’s economic interests and consumers from the menace of illicit products.
Source: Philip Morris International and associated studies
Credit: FICCI Cascade, Tobacco Institute of India