New Delhi, 16 August 2026: Directorate of Revenue Intelligence (DRI) has uncovered a large-scale network allegedly involved in mis-declaring the origin of areca nuts imported into India to fraudulently claim customs duty exemptions under the South Asian Free Trade Area (SAFTA).
According to the DRI, the investigation has so far indicated a potential loss of more than ₹2,500 crore in customs revenue in recent years. Nine people have been arrested, while around 160 metric tonnes of areca nuts and approximately ₹75 lakh in cash have been seized.
The operation followed intelligence inputs that syndicates were importing areca nuts from Indonesia, Thailand, Malaysia and other South-East Asian countries, but declaring them as being of Bangladeshi origin. Under the existing customs regime, areca nut imports attract a 100% Basic Customs Duty (BCD). Eligible imports originating from Bangladesh can receive full exemption under SAFTA, subject to the prescribed Rules of Origin.
Goods routed through Bangladesh
DRI said its investigation found that the masterminds were routing South-East Asian areca nuts through an Export Processing Zone (EPZ) in Bangladesh. The goods were allegedly moved into different containers and bags before being sent to India as Bangladeshi-origin produce. The syndicates are also alleged to have obtained SAFTA Certificates of Origin from Bangladeshi authorities and used them to claim the duty exemption.
Investigators found that the network charged substantial commissions from Indian importers for arranging routing, documentation, customs clearance and transportation. The investigation has also revealed the alleged use of cash transactions, hawala channels and dummy entities to move and layer the proceeds.
Searches in Kolkata and Visakhapatnam
DRI officers conducted simultaneous searches at several premises linked to importers, Customs Brokers and IEC holders in Kolkata and Visakhapatnam.
The searches reportedly resulted in the recovery of documents and other evidence indicating the South-East Asian origin of the areca nuts. A live consignment of around 160 MT was seized along with approximately ₹75 lakh in cash, which DRI believes to be connected with the sale proceeds of the illegally imported goods. The agency said the investigation has revealed fraudulent imports on a large scale, with customs revenue losses estimated at more than ₹2,500 crore.
Customs Broker licence suspended
The investigation also identified a Customs Broker firm that was responsible for clearing most of the fraudulent areca nut consignments identified in the case. Following the DRI investigation, the competent authority has suspended the Customs Broker's licence. Nine persons have so far been arrested in connection with the case. Further investigation is continuing.
Impact on areca growers
The alleged import fraud could have wider implications for India's areca nut market. DRI said such illegal imports can adversely affect domestic areca growers and legitimate traders by creating unfair price competition and distorting market conditions.
The agency said the operation has disrupted an organised network allegedly involved in systematic mis-declaration of country of origin, fraudulent use of SAFTA benefits and large-scale customs duty evasion.
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