DRI Busts ₹2,500 Crore SAFTA Fraud in Areca Nut Imports

• DRI uncovers an alleged customs duty fraud of over ₹2,500 crore involving areca nut imports.
• Nine persons arrested; around ₹75 lakh in cash and 160 MT of areca nuts seized.
• Syndicates allegedly misdeclared South-East Asian areca nuts as Bangladeshi to claim SAFTA benefits.
• Customs Broker licence linked to the fraudulent imports has been suspended.

GG News Bureau
New Delhi, 17th Aug: The Directorate of Revenue Intelligence (DRI) has uncovered a large-scale customs duty evasion racket involving the illegal import of areca nuts under the South Asian Free Trade Area (SAFTA) agreement, exposing an estimated revenue loss of more than ₹2,500 crore. The agency has arrested nine persons in connection with the case following a month-long intelligence-led investigation.

According to the DRI, syndicates imported areca nuts originating from Indonesia, Thailand, Malaysia and other South-East Asian countries but falsely declared them as products of Bangladesh to fraudulently claim complete exemption from Basic Customs Duty under the SAFTA framework.

The investigation revealed that the masterminds allegedly routed consignments through an Export Processing Zone (EPZ) in Bangladesh, where only the containers and packaging were changed before the goods were shipped to India as purported Bangladeshi-origin products. The accused are also suspected of obtaining fraudulent SAFTA Certificates of Origin from Bangladeshi authorities.

Simultaneous searches were conducted at multiple premises linked to importers, Customs Brokers and Import Export Code (IEC) holders in Kolkata and Visakhapatnam. During the operation, DRI officials seized approximately ₹75 lakh in cash, believed to be proceeds from the illegal trade, along with a live consignment of around 160 metric tonnes of areca nuts.

The probe has also uncovered the alleged use of hawala channels and dummy entities to move and layer financial proceeds generated through the fraudulent imports.

Officials said one Customs Broker firm was responsible for clearing a majority of the suspect consignments. Following the investigation, the competent authority has suspended the firm’s Customs Broker licence.

The DRI stated that the illegal imports not only caused significant losses to the government exchequer but also adversely affected domestic areca nut growers and legitimate traders by creating unfair price distortions and undermining regulated trade practices.

The investigation is continuing to identify the full extent of the network and any additional individuals or entities involved.