The central government has taken note of a surge in the illegal transfer of raw incense sticks from Vietnam to India under the garb of import of joss powder, which attracts zero per cent duty and is a raw material used in making 'agarbatti' or incense sticks, ever since the import of such incense sticks was put under the 'restricted' category in August 2019 by India.
According to government sources, the huge surge in the import of supposedly joss powder from Vietnam — which has led to revenue loss to the exchequer due to import duty evasion as well as loss of employment in joss-sticks manufacturing units — has prompted the authorities to hunt for the smuggling cartel operating in India apart from Vietnam and may even order a CBI probe in the coming days.
The sources said that the government is mulling to order a CBI probe to expose the unholy nexus of corrupt traders and officials.
Joss powder is used in a very small quantity in making incense sticks. For making 1,000 incense sticks, 500 gm charcoal powder, 400 gm wood powder, 300 gm bamboo sticks and only 100 gm joss powder are required.
The sources said that after the government put the raw incense sticks under the restricted category on August 31 last year to check imports from China and Vietnam, it noticed a four-fold spike in joss powder import from Vietnam in four months thereafter even as import of raw incense sticks declined to certain extent.
Citing the figures on joss powder imports from January to August 2019, the source said that only 5,749 metric tonnes at an average of 718 metric tonnes per month was imported.
The source said that after August last year, in the first four months, the import of joss powder from Vietnam saw a surge to 10,436 metric tonnes.
"From September to December, just after the import restrictions were put in place, the total import jumped up to 10,436 MT at an average of 2,609 MT per month," the source said.
"In the inquiry, it was also found that some imports were being routed via Nepal and China to dodge the authorities," the source said.
"But such heavy import of joss powder clearly points towards a huge smuggling racket run in connivance with local custom officials," the source said.
These consignments mainly arrive at ICDs at Bengaluru, Chennai and Kolkata ports.
The sources pointed out that after sensing foul play, the government launched a preliminary inquiry and found that Indian traders were actually bringing in raw incense sticks illegally from Vietnam on the pretext of importing joss powder, which is duty-free.
The highly placed sources said that the racket involves Indian and Vietnamese traders hand in glove with the custom officials in both the countries to facilitate the import of incense sticks hidden in containers, which are booked as consignments of joss powder.
The sources claimed that following a surge in the import of joss powder, the Finance Ministry has ordered for strict vigilance at Inland Container Depots (ICDs) and all ports and now every container bringing in joss powder from Vietnam will be opened for thorough checks.
The sources further claimed that panicked by the government crackdown, a number of consignments imported in the name of joss powder have been abandoned by traders as they fear getting caught.
The sources further revealed that Indian agencies had even intercepted chats between Vietnamese and Indian traders, which clearly indicated that incense sticks were being brought in illegally to India from Vietnam by 'managing' Indian Customs officials.
These conversations accessed by IANS indicate alleged involvement of custom officials.
Explaining the modus operandi of the smugglers, the source said that invoices are prepared in the name of joss powder or premix while black incense sticks are packed in containers for export from Vietnam.
He further said that while some boxes of joss powder or premix are kept in front of the containers, packets of incense sticks are hidden inside.
Custom officials were releasing the containers without opening it, the source said.
According to another government source, the ongoing illegal trade has caused a huge loss to the Indian incense stick industry, besides leading to massive import duty evasion by the traders..