Metro India News | new delhi

The Swadeshi Jagran Manch (SJM), affiliated with the Rashtriya Swayamsevak Sangh, has raised serious concerns over the growing influx of smuggled foreign cigarettes, warning that it poses a dual threat to government revenue and public health.

SJM national co-convener Ashwani Mahajan said high taxation on sin goods such as cigarettes often fuels the expansion of black markets. When legal products become unaffordable, smuggled alternatives — largely benefiting foreign manufacturers — fill the gap, undermining domestic industry and honest trade.

The issue gains urgency as India prepares for a sharp hike in cigarette taxes from February 1. Mahajan cautioned that excessive taxation could trigger a surge in illegal trade and dumping of sub-standard products, adversely affecting public health while causing significant revenue losses to the exchequer.

Mahajan noted that most small retailers want to earn an honest livelihood, but unchecked illegal trade creates unfair competition and distorts markets. He also pointed to similar issues in other sectors, including misclassification of e-rickshaws, illegal imports of cheap footwear, and other goods from China.

Retailer bodies and the Indian Sellers Collective have echoed these concerns. Its national coordinator Abhay Raj Mishra warned that higher tobacco taxes could worsen illicit trade, citing past instances where increased gold taxes led to rampant smuggling.

Mishra referred to international experiences, including Australia, South Africa and Azerbaijan, to argue that aggressive taxation can backfire when legal prices push consumers towards organised illicit networks.