The Directorate of Revenue Intelligence (DRI) of India has dismantled a major smuggling syndicate that allegedly used an Export Processing Zone (EPZ) in Bangladesh to funnel South-East Asian areca nuts into India under the guise of Bangladeshi produce.
The month-long operation unearths a massive fraud where syndicates bypassed India’s 100 per cent Basic Customs Duty on areca nuts by fraudulently claiming benefits under the South Asian Free Trade Area (SAFTA) agreement.
While areca nuts from Bangladesh are exempt from this duty if they meet specific Rules of Origin criteria, the DRI found that the smuggled goods actually originated from Indonesia, Thailand, and Malaysia.
According to the DRI, the masterminds of the scam facilitated the entry of these South-East Asian nuts into a Bangladeshi EPZ. Once inside the zone, the goods were rerouted to India after merely changing their containers and bags to pass them off as being of Bangladeshi origin.
Crucially, the investigation revealed that the syndicates had fraudulently obtained SAFTA Certificates of Origin from Bangladeshi authorities to support their false declarations.
The scam has reportedly duped the Indian exchequer of more than Rs2,500 crore in recent years. Nine individuals have been arrested so far in connection with the case.
Simultaneous searches conducted in Kolkata and Visakhapatnam at premises linked to importers and Customs Brokers led to the seizure of Rs75 lakh in cash, believed to be proceeds from the illegal trade, and a live consignment of approximately 160 metric tonnes (MT) of areca nuts.
The investigation also exposed the use of hawala channels and dummy entities to move and layer the financial proceeds of the operation.
The DRI further identified a specific Customs Broker firm as being responsible for the majority of these fraudulent clearances, leading to the suspension of its licence.
Indian officials noted that these illegal activities not only cause a significant loss of government revenue but also create unfair price distortions for legitimate trade and domestic areca nut growers.
Moreover, the systematic misuse of the SAFTA framework is seen as a threat to regulated trade practices and economic security in the border regions.
