Date: 28/02/2023

Relevance: GS-3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment.

Key Phrases: Directorate of Revenue Intelligence (DRI), smuggling and counterfeiting, FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy), Anti-Smuggling Day.

Why in News?

• India has seen a significant rise in smuggling activities, with the Directorate of Revenue Intelligence (DRI) reporting seizures of 833 kg of smuggled gold worth ₹405 crores, 28,334 kg of narcotic drugs and psychotropic substances, and smuggled cigarettes worth around ₹93 crores in its latest report (2021-22).
• Smuggling results in an annual drain of $2.2 trillion globally.

Problems posed by smuggling:

• Loss of revenue:
  • Smuggling results in a loss of revenue for the government as smuggled goods are not taxed or duty paid. This, in turn, hinders development initiatives and leads to a decline in economic growth.
• National security threat:
  • Smugglers often use illegal means to transport goods across borders, threatening national security. Smuggling can also be linked to organized crime, terrorism, and money laundering.
• Unfair competition:
  • Smuggling creates an unfair advantage for those involved in the illicit trade, leading to an uneven playing field for legitimate businesses. This, in turn, affects the growth and sustainability of legitimate businesses.
• Health and safety risks:
  • Smuggled goods are often of inferior quality and can pose health and safety risks to consumers. For instance, smuggled drugs and counterfeit medicines can be harmful and may not be effective in treating illnesses.
• Environmental impact:
  • Smuggling of banned substances and hazardous waste can have severe environmental consequences. For instance, smuggling electronic waste can lead to the dumping of toxic materials, which can pollute the environment.
• Societal impact:
  • Smuggling often fuels social problems such as drug addiction, human trafficking, and corruption. It also undermines the rule of law and erodes public trust in government institutions.

What needs to be done?

• Strong enforcement mechanism:
  • A well-established enforcement mechanism is necessary to combat smuggling effectively. This includes measures such as border controls, intelligence gathering, and coordinated efforts between law enforcement agencies.
• Widespread awareness:
  • Widespread awareness about the harmful effects of smuggling can play a significant role in addressing the issue. This can be achieved through public campaigns, media outreach, and education programs.
• Consumer action:
  • Consumers can play a vital role in combating smuggling by avoiding purchasing smuggled goods and reporting suspicious activities to the authorities.
• International cooperation:
  • Smuggling is a global issue that requires international cooperation to combat effectively.
  • India should work with other countries and international organizations to share information, intelligence, and best practices to combat smuggling.

FICCI CASCADE's efforts to Curb Smuggling in India:

• Anti-Smuggling Day:
  • FICCI CASCADE launched Anti-Smuggling Day on February 11, 2022, to create awareness about the negative impact of smuggling on the economy and society.
  • The organization conducts various programs on this day to sensitize people, especially the youth, about the dangers of smuggling and encourage them to say no to smuggled goods.
• Youth Programs:
  • FICCI CASCADE runs several programs to sensitize school and college children about the negative impact of smuggling and counterfeiting on the economy and society.
  • The organization conducts competitions, seminars, and workshops to create awareness among the youth and encourage them to stand against smuggling.
• Regional and National Campaigns:
  • FICCI CASCADE runs nationwide campaigns to address the challenges posed by smuggling and counterfeiting at the regional and national levels.
• Reports and Studies:
  • FICCI CASCADE conducts research and publishes reports on the impact of smuggling and counterfeiting on various sectors of the economy.
  • Their latest report, 'Illicit Markets: A Threat to Our National Interests', estimated the tax loss to the government due to illicit goods at ₹58,521 crore in 2019-20.
  • The organization presents recommendations to curb the menace of smuggling and counterfeiting.

Conclusion:

• Like any complex problem, there is no silver bullet to address the insidious threat of smuggling.
• However, concerted efforts from various stakeholders, including strong enforcement mechanisms, public awareness, and youth engagement, can help address the issue efficiently.
• CASCADE's Anti-Smuggling Day and youth engagement programs are steps in the right direction, and more initiatives are needed to create a robust anti-smuggling movement.
• CASCADE should continue to appeal to national and international platforms for the need to recognize Anti-Smuggling Day as a globally important date and chart an effective course of action to tackle this socio-economic scourge.

Source: The Hindu BL

Mains Question:

Q. Examine the impact of smuggling on the Indian economy and its various sectors, with special emphasis on the illicit trade of gold, drugs, and counterfeit goods. What measures can be taken to strengthen law enforcement and consumer awareness to counter the menace of smuggling?