Nine Arrested as DRI Unearths ₹2,500 Crore Betel Nut Import Fraud
Summarized by AI; it may make mistakes. Check important info
Summarized by AI; it may make mistakes. Check important info
The Directorate of Revenue Intelligence (DRI) has dismantled a major international smuggling racket that fraudulently imported South-East Asian betel nut into India under the South Asian Free Trade Area (SAFTA) agreement, evading over ₹2,500 crore in customs duties.
Nine individuals, including masterminds and customs brokers, have been arrested following a month-long operation spanning multiple port cities.
Modus Operandi Behind the Tax Evasion
India imposes a 100% basic customs duty on betel nut imports to protect domestic farmers. However, goods originating from Bangladesh qualify for complete duty exemption under SAFTA rules of origin.
Syndicates exploited this loophole by sourcing betel nut from Indonesia, Thailand, and Malaysia and shipping consignments to an Export Processing Zone (EPZ) in Bangladesh.
There, operatives repacked the produce into new bags and containers, secured fraudulent Bangladeshi origin certificates, and dispatched the cargo to Indian ports.
Raids and Seizures Across Major Ports
Simultaneous raids across Kolkata and Visakhapatnam targeted importers, customs brokers, and IEC holders. Officers seized a live consignment of 160 tonnes of betel nut alongside ₹75 lakh in cash suspected to be sale proceeds from previous illegal shipments.
Investigators found that a single customs broker firm handled the bulk of these misdeclared clearances.
Customs authorities have since suspended the firm's license, while financial probes established that hawala networks and shell companies were deployed to layer and transfer illicit funds.
Domestic Market Distortions
The illegal inflows severely undercut local betel nut cultivators by flooding domestic markets with artificially cheap produce.
Beyond causing staggering revenue losses to the national exchequer, the illicit trade disrupted fair competition for law-abiding importers and compromised economic security along border corridors. Further investigations into linked trade entities remain ongoing.
