The Centre has initiated a nationwide crackdown against alleged large-scale smuggling of hair out to China via land routes, running into crores of rupees annually. This follows intelligence received by the Special Investigation Branch (SIB) of the Air Cargo Complex of Kolkata Customs on undervalued exports of hair, mostly shipped to Myanmar.

“Alerts have been issued by Kolkata Customs to field formations across the country for increased vigilance and lookout for under-invoiced exports of hair. Consignments worth about ₹7 crore have already been seized since the crackdown started this January,” an industry source told BusinessLine .

Over the past decade, human hair worth an estimated annual ₹8,000 crore has been smuggled out of India through under-invoicing, causing losses worth crores in taxes and job losses, the source said. The smuggled hair is used to make wigs and extensions.

In early 2019, the Commerce Ministry had written to the Central Board of Indirect Taxes and Customs and the Anti Smuggling Unit to take action after the Human Hair & Hair Products Manufacturers and Exporters Association of India (HHHPMEAI) complained of exports at a very cheap rate from Tiruchi, Hyderabad, Kolkata and Chennai.

“The SIB carried out a discreet survey documented by the industry body in Purba Medinipur District of West Bengal, where it was learnt that raw human hair of high grade was priced at over ₹5,000 per kg while exports were happening at ₹250-1,400 per kgThere was enough proof that large scale under-invoicing was taking place and the smuggling needed to be checked,” the source said.

How it works

The modus-operandi is simple, explained Sunil Eamani from HHHPMEAI, which worked with Kolkata Customs in carrying out the market survey.

“The hair exported to Myanmar are under-invoiced hugely to escape FEMA compliance and income-tax. This enables the smuggling of massive quantities to China via land routes to escape close to 28 per cent Chinese import duty. In Myanmar, children are employed to sort out the unprocessed hair and are paid a pittance, creating job losses in India. The difference in export value then makes its way back into India in the form of smuggled gold from Myamar,” he said.

Smugglers have now started looking for alternative routes such as Hyderabad and Shillong.

“The Prime Minister’s Office has already written to the Shillong authorities warning them about unreported hair being smuggled across the North East borders. Our association is now working with Assam Rifles, the local police and Customs in the NE region based out of Shillong,” he said.

The human hair exporters’ association is also working with the governments in Myanmar and China to track down importers who were participating in the smuggling, Eamani added.