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The government needs to take steps such as raising awareness and moderating taxes on goods to check illicit trade in the country, said a Ficci-KPMG study.
It also said funds generated through such trade practices are used for terror financing and organised crime.
“Many prominent terrorist organisations such as Hezbollah, Lashkar-e-Taiba, Al Qaida, Irish Republican Army, etc rely on illicit trade for financing up to 20 per cent of terror operations,” the report said.
Ficci Secretary General Sanjaya Baru said illegal trade in smuggled, counterfeit and pirated goods dampens the economy. “It destabilises the legal industry, restrains innovation and investments, reduces government revenues and hampers the health and safety of consumers,” he said.
According to a report published by OECD and European Union Intellectual Property Office in April 2016, it is estimated that the total economic and social costs globally due to counterfeit and piracy stood at $737-898 billion in 2013 and is expected to rise to $1.54-1.87 trillion by 2022.
Apart from this, the total job losses globally due to counterfeit and piracy stood at 2-2.6 million in 2013 and is expected to rise to 4.2-5.4 million in 2022.
The most commonly counterfeited and smuggled goods are tobacco, cigarettes, electronic items, gold, machinery and parts, alcoholic beverages, auto components, fast-moving consumer goods, and mobile phones.