Illicit tobacco trade causes India Rs 23,000 cr loss: Philip Morris

Philip Morris India commits to dismantling the illicit tobacco network, a trade causing Rs. 23,000 crore annual loss in India. The issue has expanded to include banned e-cigarettes, with recent DRI seizures highlighting the scale of the problem.

On the occasion of World Anti Counterfeiting Day, Philip Morris India (PM India) reiterated its commitment to dismantle the illicit tobacco network through stronger enforcement and collaboration. As per the Tobacco Institute of India (TII), in India, illicit cigarettes represent nearly one-fourth of the domestic market, with estimated losses of Rs. 23,000 crores per annum.

Illicit tobacco trade is a growing global challenge, causing significant revenue loss through cross-border smuggling of illegal cigarettes. The issue has expanded beyond cigarettes to include banned and unregulated products like e-cigarettes and vapes, which often bypass regulatory checks.

The Illicit Market in ASEAN

As per a report released by EU-ASEAN Business Council (EU-ABC) and Euromonitor International, the illicit tobacco market across the ASEAN-6 generated an estimated US$12.6 billion in revenue over the past two years (2024-2025), with illicit cigarette sales growing by 14% and illicit e-vape sales by 24% in the past year alone. Demand for illicit tobacco is driven by lower prices and growing accessibility of smuggled products, while supply is facilitated by ASEAN's extensive and interconnected trade routes and uneven supply chain controls. These smuggled products are largely produced within the region in Indonesia, Cambodia with additional supply from China, while Malaysia, Singapore and Vietnam are key distribution hubs.

The Rise of Illicit E-Cigarettes

A report by ApiraSol, an organization specializing in brand protection and supply chain intelligence, 'Smuggled Puffs: Illegal E-Cigarette Trade Across Borders', April 2026, highlights that the illicit e-cigarette trade is becoming a significant force reshaping the global nicotine market, fuelled by rapid growth and mounting regulatory complexity. Furthermore, it states that the illicit e-cigarette market was valued at USD 47 billion in 2024, representing over 70% of global spending and roughly three-quarters of total volume- equivalent to 605 billion cigarettes.

Enforcement and Seizures in India

As the Government of India deepens enforcement and sharpens regulatory capabilities to detect smuggled products, addressing the wider consequences of the illegal tobacco trade remains critical. Reinforcement data stresses the expanding scale of illicit tobacco across the country. Today, a broader ecosystem of banned and unregulated products are available in India that evade regulatory scrutiny. In May 2026, DRI seized 3,00,000 electronic cigarettes/vapes worth Rs. 120 crore in a major crackdown on e-cigarette smuggling racket across Maharashtra, Gujarat, Delhi and West Bengal

According to TII, in 2026, sustained enforcement by agencies has resulted in continued seizures of illicit cigarettes, including over 29.3 lakh sticks in Kolkata, 6 lakh sticks in Guwahati, 3.48 lakh sticks in Coimbatore, and 1.3 lakh sticks plus 95 boxes of foreign cigarettes in Chandigarh, reflecting the widespread and persistent nature of the black market across regions.

A Call for Collaboration

Stressing the need for enhanced anti counterfeiting regulations alongside closer collaboration, Navaneel Kar, Managing Director, PM India, said, "Illicit tobacco trade continues to evolve in scale and complexity, posing significant risks to government revenues, consumer safety, and regulatory integrity. What was once limited to counterfeit cigarettes has now expanded into a broader ecosystem of smuggled, banned, and unregulated products that evade oversight. Recent enforcement actions underscore both the scale of the challenge and the need for sustained intelligence-led interventions. Addressing this issue effectively requires stronger collaboration between industry and enforcement agencies, supported by robust systems such as track-and-trace to enhance transparency across the supply chain. At PM India, we are committed to leveraging our global experience and local partnerships to support authorities in strengthening compliance, safeguarding legitimate trade, and building a more secure marketplace."

India's Potential Leadership Role

India's fight against smuggled tobacco is increasingly critical, given its position as one of the world's largest tobacco markets and home to the second-largest smoking population. As a leader of the global south and an innovation hub, India, with its strong enforcement, can lead a concentrated regional effort to curb this menace and protect consumers from counterfeit products. (ANI)

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