The threat from Illicit trade in India

Why in the News?

Around 3.5 tonnes of gold, 18 crore cigarette sticks, 140 metric tonnes of red sanders and 90 tonnes of heroin were seized along with other drugs during the last financial year.

Highlights of a report released by FICCI CASCADE:

1. In the organised crime segment, India has a lower score of 4.3 against 5.2 for an average of 122 countries.
2. Though there are fewer criminal actors, they are widespread and engage in a variety of unlawful activities such as drug and human trafficking and the illegal trade in wildlife products.
3. The efficacy of criminal networks in India have enabled them to generate substantial illicit financial flows, despite their small numbers.
   1. This has led to total potential revenue loss of US $13 billion involving both mis invoiced imports and exports to India.
   2. The uncollected value-added tax (VAT) amounted to a total of $3.4 billion.
   3. For the 2009-2018 period, the total aggregate value gap of misinvoicing was over $674.9 billion.
   4. In 2018, India had a value gap of US $84.9 billion. The value gaps as the percentage of the trade, however, declined marginally.

4. Terror and Crime: Economic Impact of Violence for India (Billions PPP)
   1. In 2021, India’s economic cost for violence was at US $1170 billion at purchasing power parity (PPP) which accounts for approximately 6% of the country’s GDP.
   2. The violence per capita impact is estimated at US $841 at PPP.
   3. 80% of such containment costs relates to security.

5. Organised Crime and Illegal Economy in India:
   1. The aggregate score of organised crime actors in India is low, at 4.3 on a scale of 1-10, compared to the average benchmark of 5.2 for 122 countries.
   2. The criminal network has a significant influence in India with a score of 6, which is higher than the average score of 5.8 for 122 countries.

5. 3. The illegal economy in India has an overall score of 6.3, which is higher than the average score of 5 of 122 countries.
6. Drug Economy in India:
   1. India’s location near major drug-producing regions has been associated with activities that may involve the transportation and distribution of controlled substances. 
      1. The Golden Triangle (Myanmar, Laos, and Thailand)
      2. The Golden Crescent (Afghanistan, Pakistan, and Iran)
   2. There has been an increase in the illicit drug trade in India stating that 3,172 cases of drug seizures were recorded during 2014-2022 as against 1,257 cases in 2006-2013.
   3. Total 4,888 arrests were made during the same period for these seizures involving 3.33 lakh kg of drugs worth Rs 20,000 crore.

1. 4. Among the various kinds of drugs, Cannabis has a higher score of 7.5, compared to the benchmark average of 5.4, indicating its significant presence in India in comparison to other countries.
   5. The synthetic drug trade and the heroin trade both had scores of 6.5, which exceeded the benchmark averages of 5.3 and 4.6, respectively.