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Deep Chand, Advisor FICCI CASCADE and former special commissioner of Police, New Delhi said “Illicit trade across the borders is impacting the social fabric of nations; India in particular is a victim of large scale smuggling. Amongst the various sectors, the maximum revenue loss to the exchequer on account of counterfeiting and illicit trade is attributed to tobacco products at 23%, estimating a revenue loss of Rs. In India, legal cigarette constitutes 11% of the total tobacco consumption in volume. Due to the rising prices of cigarettes, 74% smokers are willing to switch to cheaply-priced smuggled or illegal cigarettes. Today, Indian smokers find the cheaper alternatives – smuggled cigarettes – more attractive and as per the report there has been over 90% increase in consumption of smuggled cigarettes in the past 10 years. The report talks about trade of illicit cigarettes, which constitute a significant component of the tobacco industry and is leading to the loss of revenue to government, loss of business to the legitimate industry, livelihood opportunities, adversely impacting farmers, besides being a threat to national security. According to studies quoted in the report, in Canada, taxes have been shown to increase the size of black markets and to cause economic activity to move underground as price-sensitive individuals look for creative ways to evade taxation.1%.An econometric analysis by Jean-Francois Ouellet, Associate Professor of Marketing at HEC Montreal, and his co-authors Mariachiara Restuccia, Alexandre Tellier and Caroline Lacroix, on the consumer behaviour in Canada found that each additional dollar in taxes raises the propensity to resort to consuming contraband cigarettes by 5. The report also found that over 56% smokers prefer the attractive packaging of smuggled foreign brands that do not carry health warning as mandated by Indian regulatory environment.This seminar, attended by over 150 BSF officers from across the country, addressed ways and means to combat illegal cross-border flows, facilitate cooperation and coordination among stakeholders and aimed at sensitizing the officers on the magnitude Stretch knit fabric Factory of the menace. Studies have shown that in the tobacco industry, consumers’ willingness to switch from smoking legally purchased cigarettes and tobacco to contraband products increases with tax hikes.