ICCI CASCADE hosted a Twitter Spaces session featuring Mr. Sanjay Kumar Agarwal, Former Chairman, Central Board of Indirect Taxes and Customs (CBIC), offering valuable insights into the evolving landscape of customs enforcement and trade facilitation in India.
During the discussion, Mr. Agarwal highlighted the vast scale at which Indian Customs operates, managing nearly 50,000 cargo entries and 1,25,000 courier shipments each day. To efficiently handle this volume while preventing port congestion and reducing business costs, the department leverages a highly automated Risk Management System (RMS) powered by Artificial Intelligence and Machine Learning. This advanced system enables the seamless clearance of around 85% of legitimate trade, while selectively flagging high-risk consignments for closer scrutiny.
The discussion also underscored how high tax structures often act as a key driver of illicit trade. Commodities such as areca nuts, which attract import duties of up to 100%, and cigarettes, which are subject to steep domestic taxes, frequently become targets for smugglers seeking higher profit margins. Mr. Agarwal noted that illicit cigarettes account for an estimated 26% to 33% of the total market in India, positioning the country among the largest markets for illicit tobacco globally. The challenge is further intensified by the growing nexus between smuggling and organised crime networks, which employ sophisticated mechanisms, including money laundering and cryptocurrencies, to finance illegal activities and undermine regulatory frameworks.
Mr. Agarwal emphasized that India has undertaken several key policy reforms, most notably the introduction of the Goods and Services Tax (GST). The GST Network (GSTN) serves as an integrated data platform, linking cross-border transaction data from Customs with domestic supply chain information. This integration enables tax authorities to deploy advanced analytics to identify revenue leakages and detect fraudulent transactions more effectively. In addition, India is progressively adopting digital traceability measures, such as WHO-aligned track-and-trace systems, to enable real-time monitoring of supply chains and curb the infiltration of counterfeit and illicit goods into the formal market.
Mr. Agarwal mentioned that dismantling illicit trade requires a deeply collaborative framework involving multiple stakeholders. This includes not only inter-agency cooperation between enforcement agencies but also the active participation of the private sector. FICCI CASCADE plays a vital role in this ecosystem by fostering public awareness and steering national debates on the socio-economic hazards of smuggling and counterfeiting.
