4 days ago
Experts Call for Cross Sector, International Collaboration and Tech led Tracking and Enforcement to Curb Illicit Tobacco trade
At the recent summit held in Manila, 'Combatting Illicit Trade in Southeast Asia: Cross-border and Cross-Sector Strategies for Tackling the Threat', experts from Southeast Asia underscored the escalating threat of illicit tobacco trade — a challenge undermining public health systems and draining government revenues in India and Southeast Asia. Fueled by affordability gaps, tax disparities, and weak enforcement, the illegal tobacco market is expanding rapidly. Globally, an estimated 500 billion illicit cigarettes are consumed annually, representing 14–15% of total tobacco use. These products evade taxation and quality control, resulting in significant fiscal losses and heightened health risks.
Jericho Nograles, President, Philippine Tobacco Institute, highlighted how the scale of the problem is growing 'In the Philippines, one in five cigarettes is illicit, with a sharp rise seen post-pandemic. Yet governments often avoid discussing the issue, sometimes due to embarrassment. Legal exports can end up fueling illicit imports elsewhere so we need to normalise honest policy dialogue about the existence of illicit trade, if we want real solutions.'
On the sidelines of the event, Rodney Van Dooren, Head of Illicit Trade Prevention, Philip Morris International said, 'Illicit tobacco is not just an economic concern but also a health hazard. Counterfeit cigarettes have been found to contain up to 160% more tar and 133% more carbon monoxide than regulated products. In India, where about 120 million people smoke cigarettes, nearly one in four is illicit. Industry estimates suggest this translates into annual excise losses of ₹12,000–13,000 crore (USD 1.5–1.6 billion).
'Illicit tobacco trade in India, and globally, requires a multifaceted approach: balancing regulatory oversight with consumer realities, leveraging technology alongside G2G cooperation with source and transit countries, and stronger enforcement mechanisms The path forward is not just about limiting supply but about understanding demand and building systems that address both,' he added.
The affordability of these unregulated products, particularly in low-income and border regions, drives sustained demand. In some cases, the absence or prohibition of regulated, less harmful alternatives has inadvertently pushed consumers toward black-market products. Regional dynamics further complicate enforcement. Illicit products often originate legally in one jurisdiction before being smuggled into others.
Chris Humphrey, Executive Director of the EU-ASEAN Business Council, called for a pragmatic reassessment of current fiscal and enforcement strategies, 'Excessive and complex taxation structures create profit margins that make smuggling highly attractive. If we don't have the right IP laws in place, and we don't have the right enforcement in place, that encourages illicit traders. Enforcement is also limited by resources and low penalties, which means there's little deterrent for those involved in these businesses.'
Experts agreed that a coordinated approach — including tax rationalisation, cross-border regulatory harmonisation, and technology-led tracking and enforcement — is vital. Without urgent reforms, the illicit tobacco trade is set to continue eroding public health gains and economic stability in the region.
