Key Highlights
- Ashwani Mahajan, National Co-Convener of the Swadeshi Jagran Manch, said, “High taxes on sin goods have historically led to expansion of the black market, with smuggled products — often benefiting foreign producers — filling the gap created by unaffordable legal prices.
- Policymakers should consider ground realities and avoid creating conditions where smuggling becomes the only alternative, undermining domestic producers and honest retailers.” He added that if smuggling were to increase sharply, small shopkeepers and kirana retailers, who form the backbone of India’s retail economy, would be bearing the brunt of the problem.
- “Majority of small retailers wish to earn an honest livelihood, but the unchecked spread of illegal products by unscrupulous elements distorts the market and creates unfair competition,” Mahajan said, calling for stronger enforcement against smuggling networks.
- Smuggling remains a major menace in India due to porous borders and entrenched illicit supply networks conditions that critics say are worsened when legal products become prohibitively priced.
- Recent global examples underscore this risk, from the shutdown of a cigarette manufacturing facility in South Africa after smuggled sales overwhelmed the legal market, to the detention of a former senior customs official in Azerbaijan in a high-profile tobacco smuggling case, highlighting how price distortions can fuel organised and systemic illegality.
