This Independence Day, a pledge to free India from the menace of illicit tobacco trade

NEW DELHI, Aug. 17, 2024 /PRNewswire/ -- This Independence Day, Philip Morris International's (PMI) India affiliate, IPM India, reinforces its commitment towards illicit tobacco trade prevention to safeguard India's economic interest & protect consumers. Illicit tobacco trade is a major threat and growing challenge worldwide. As part of its continued efforts towards tackling illicit trade menace, PMI's strategy focuses on five critical areas research & intelligence, protecting supply chain, partnerships, cooperation with law enforcement and raising awareness. The organisation supports and helps law-enforcement agencies by inspecting and authenticating seized products and performing forensic evaluations. Additionally, profiles illicit products, shares intelligence on emerging routes and trends shaping the black market, and trains officials on the innovative authentication and security features of products. 

India has witnessed a significant rise in illicit in recent years and it only seems to rise with time. As per 2022 FICCI Cascade study, the overall market for illegal cigarettes in India is estimated to be at ₹22,930 crore. As per the reports, the total loss to the Govt. of India estimated for 2022, on account of the illicit markets in the tobacco industry is ₹13,331 crore, up from ₹6,240 crore in 2012, an increase by 46%. According to the Tobacco Institute of India (TII), the illegal cigarette trade comprising internationally smuggled and locally manufactured tax-evaded cigarettes account for as much as 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. In India, we are 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."

About IPM India

IPM India Wholesale Trading Private Limited is a joint venture between Philip Morris Brands SARL of Switzerland and two Indian entities, Godfrey Phillips India Limited and K.K. Modi Investment & Financial Services Private Limited.