Widespread smuggling, counterfeiting and piracy hindering India’s goal of becoming a manufacturing hub of the world, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).
“The market for contraband, smuggled and counterfeit goods is thriving in India and is today one of the biggest challenges faced by the domestic industry”, FICCI said in a statement.
As reported in India’s Economic Times: “It also said illegal money generated through illicit trade is a major source to finance terrorism, insurgency and other organised crimes.”
To deliberate upon all these issues, FICCI is organising a two-day event – ‘MASCRADE 2017 – Movement Against Smuggling and Counterfeit Trade‘ from October 12-13.
How Criminal Entrepreneurs are Confiscating the Economic Potential of Communities and Corrupting Governments and the Integrity of Markets
Illicit trade is a worldwide phenomenon. Globalisation has provided opportunities for criminal networks to expand the scope and scale of their operations, with serious negative consequences for the economy, the environment and society.
I commend the Federation of Indian Chambers of Commerce and Industry (FICCI) for starting a frank and honest dialogue in India on the harmful effects of illicit trade to the country’s economic potential and long-term economic development. The wicked impacts of illicit trade and illicit markets harm economies all around the world.
For years, I have been speaking about how the illicit activities of organized criminals threaten not only the interdependent commercial, transportation, and transactional systems that facilitate free trade and the movement of people throughout the global economy, but jeopardize governance structures, economic development, security, and supply chain integrity.
Increasingly, is their penetration into the fabric of our daily lives by capitalizing on our vulnerabilities, and through a variety of criminal schemes, including money laundering, reinvesting their criminally-derived proceeds to create parallel markets based on corruption and criminality, and hubs of fear.
Make no mistake the illicit trade is a highly profitable investment and trade for criminals these days including counterfeiting and pirated goods, including illegal cigarettes and alcohol products, pharmaceuticals, computers and electronics, and other illicit commodities. Trafficking in counterfeit luxury and designer goods and accessories has particularly become more profitable to organized crime than narcotics trafficking.
Of course, the illegal economy and demand for counterfeit medicines or fake handbags, shoes, perfumes, apparel and other luxury products make it harder for legitimate business to compete against these imported fake products.
In these instances, illicit trade results in lost profits for companies, job displacements for workers, and with business closures, governments too are economically impacted as less revenue is brought into the treasuries to fund public services.
But here again, I believe that FICCI is on point: widespread smuggling, counterfeiting and piracy “hinders India’s goal of becoming a manufacturing hub of the world”. It stymies innovation and hampers national governments and industries alike from realizing their full economic potential.
However, economic loss is not the only harm that results from fake goods. Companies also have to address the diminished integrity and market reputation of their venerable brands that they have worked hard to build and innovate upon over many years.
Finally, it is a reality that the same bad actors and networks who reinvest their blood money into the legal economy and who are undermining the good efforts of dedicated public servants and businesses to spur ethical, rule-of-law based markets and to broaden prosperity across communities—these bad actors and networks remain winners in the illegal economy.
There are no global problems that can be solved by any one partner working alone.
We need to drain the swamp of criminality and cesspools of illicit activity that are corrupting our institutions, markets, and iconic brands.
We must not allow any further opportunities for criminal entrepreneurs to fill the role of governments and private enterprise as service providers in our societies nor allow their blood money to become the currency that sustains the global or local economy.
Crimes such as counterfeiting, human trafficking, money laundering and corruption are often interconnected, with profits from one illicit trade area used to advance further criminal complicity in other areas.
If we are not vigilant, the illegal economy presents an existential threat that communities around the world cannot afford to ignore.
At a time when global risks are growing and converging, the international community must come together and build our own “network” to fight criminalized markets and to stand up to and defeat the dark world of illicit trade.