Federation of Indian Chambers of Commerce & Industry

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Background

The Federation of Indian Chambers of Commerce & Industry (FICCI) is India’s largest and oldest apex business chamber in India, founded in 1927. It describes itself as “Industry’s Voice for Policy Change”, and as providing a platform for networking and consensus building within and across sectors directly and indirectly for around 300,000 companies. 1, 2

Relationship with the Tobacco Industry

India’s largest cigarette manufacturer Indian Tobacco Company Limited is a FICCI associate member. Its Senior Vice President of Corporate Affairs Anil Rajput chairs two of the three key FICCI committees that he sits on:

  • FICCI CASCADE (Committee on Anti-Smuggling & Counterfeiting) – Chairman since 201234
  • FICCI – IPR Committee (Intellectual Property Rights) – Co-Chairman since 201345
  • FICCI Corporate Law Committee3 Member since 201746

ITC Chairman and chief executive Sanjiv Puri is a former Chairman of FICCI’s Fast Moving Consumer Goods Committee. 7 (In addition to its core tobacco business, ITC has investments in the non-cigarette FMCG retail and food sectors, hotels, agribusiness and packaging).
Another tobacco industry associate member is Godfrey Philips India Ltd (GPIL), 8 the flagship company of the multi-billion dollar Modi Enterprises, and a manufacturer / distributor of Marlboro cigarettes in India under licence from Philip Morris International.9 PMI holds a 25% stake in GPIL. 10GPIL’s former chairman KK Modi, who died in November 2019, was a former President of FICCI from 1997-98.11

FICCI Anti-Smuggling Committee Chaired by Tobacco Boss

In January 2011, FICCI set up a cross-sector Committee Against Smuggling and Counterfeiting Activities Destroying Economy (CASCADE) to counter what it described as a growing problem in illicit trade. Its remit covers research and proposing law reforms; raising awareness; capacity building and interaction with law enforcement agencies including Judges, Police and Customs; workshops on enforcement techniques, procedure and strategy; engaging with various ministries at state and national level; and sharing best practice for combatting contraband, smuggled and counterfeit products. 12 Activities have also included joint publicity campaigns with the Ministry of Consumer Affairs, as well as youth festivals and youth-focused awareness-raising campaigns in 100-plus schools, for example its “Awareness through Art” competition.13,
14
ITC’s Senior VP of Corporate Affairs Anil Rajput was appointed Chairman of CASCADE in 2012. The committee holds a high-level “Movement Against Smuggling and Counterfeit Trade” (MASCRADE) conference every year. Attendees and speakers include Ministers, business leaders, Interpol and senior officials from the Indian Police, Government, UN, OECD, WIPO, UK Intellectual Property Office, UK HM Revenue and Customs, the Australian Border Force and US Homeland Security. 15, 16 Tobacco industry invited speakers at the 2019 conference included ITC’s Anil Rajput and Sandeep Kaul, Divisional Chief Executive, India Tobacco Division, ITC.17. Government officials included Anurag Thakur, India’s Minister of State for Finance and Corporate Affairs; and Huw Watkins, Head of Intelligence and Asia Policy at the UK Intellectual Property Office (IPO). 1819

FICCI CASCADE Think Tank and Publications

FICCI CASCADE has its own dedicated website and describes itself as a think tank. It has 11 members many of them former senior government officials. Nowhere on the site, or in any of the aforementioned conference literature, is Rajput’s affiliation or position as a senior tobacco industry boss at ITC mentioned.20
CASCADE also regularly publishes reports on cross-sector illicit trade. In 2019 it released ‘Invisible Enemy: Impact of Smuggling on Indian Economy and Employment’, prepared by Thought Arbitrage Research Institute (TARI) on its behalf. Described by ITC’s Anil Rajput as “the first quantitative study in India that estimates revenue and direct employment loss in five specific industries of the economy”, its findings include impacts for the tobacco sector. According to an op-ed by CASCADE advisor PC Jha who is a former chair of the Central Board of Indirect Taxes and Customs, “cigarette smuggling based on consumption approach showed that the quantum of smuggling of cigarettes was Rs 8,750 crore in FY18, resulting in 14 to 20 per cent of output loss to domestic tobacco manufacturers”.21, 22

FICCI-KPMG Report on Illicit Trade Fuelling Terror Financing and Organised Crime

In October 2017, FICCI and international auditing firm KPMG released a widely-publicised report titled “Illicit trade: Fuelling terror financing and organised crime”. The report argued that to combat smuggling across various sectors including tobacco, the Indian government needed to take steps such as moderating taxes on goods and raising awareness.23

FICCI CASCADE Report Claims 90 % Rise in Smuggled Cigarettes Over a Decade

In October 2016, six months after Indian government-mandated 85% pictorial health warnings on tobacco products came into force, FICCI CASCADE released a report claiming there had been a “90% rise in consumption of smuggled cigarettes in India” in the prior decade.
Titled ‘Need for Policy Reforms to Combat Illicit Markers – Case Study on Tobacco Industry’, the report estimated that the quantity of smuggled cigarettes consumed had soared from 12.5 billion sticks to 23.9 billion sticks between 2006 and 2016. The report also declared that “over 56% of smokers preferred the attractive packaging of foreign smuggled brands which does not adhere to Indian regulations like pictorial warning on 85% space of the cigarette pack”. 24
However, such findings stand in stark contrast with those of the first independent study of India’s illicit cigarette trade published several months later in BMJ Tobacco Control in January 2018. Its authors found that just 2.73 % of cigarettes sold annually in India were illegal, calling into question whether the tobacco industry’s own routine estimates of illicit trade at 20-25 % a year, were vastly overrated.25, 26

Opposed Larger Pictorial Health Warnings on Tobacco Products

FICCI was part of the network of seemingly independent third party groups mobilised by the tobacco companies between April 2014 and April 2016 against the Indian Health Ministry’s proposed changes to graphic health warnings (GHWs)27 covering the front and back of cigarette packs from an average 20% to 85%.28
Strict control measures such as large mandatory GHWs are considered an important and effective way to reduce appeal and help curb demand for tobacco products, which kill around 900,000 people a year in India. Under Article 11 (Packaging and Labelling) of the global WHO FCTC treaty signed by India in 2004, the Government is required to apply health warnings to no less than 30% and ideally more than 50% of display areas.29
Outraged by the proposal for what it called “excessive” warning sizes, India’s multibillion dollar tobacco industry unleashed its full playbook of tactics to try to derail the Ministry of Health’s plans.27 Aggressive political lobbying and legal bullying, in particular, delayed implementation until 2016 – at least an extra year longer than anticipated for the passage of the legislation.30 The industry, backed by FICCI and other important trade and business associations, had argued that the new rules would have unintended consequences such as increased cigarette smuggling and enormous impacts on farmers’ livelihoods, among other issues. 31,32
The Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014 (COTPA) eventually came into effect from 1 April 2016,33 although legal challenges by the tobacco companies continued until a Supreme Court ruling against them in 2018.30 The new law saw India rise from 136th to third on a country ranking of tobacco product pictorial warnings worldwide in 2016.34

Lobbying for Indian Tobacco Farmers and Trade Bodies’ to Attend COP7

In November 2016, FICCI’s Secretary General, Dr Alwyn Didar Singh asked the Union Ministry of Health and Family Welfare to let tobacco farmers and industry trade bodies into the seventh Conference of Parties (COP 7) to the WHO Framework Convention on Tobacco Control (WHO FCTC), which India was hosting for the first time that month. In a letter released to the media Dr Singh wrote:

” …we wish to cordially request you to invite industry and tobacco farming associations to take part in the deliberations at the meet. For CoP7 to be able to chart out a cohesive and rational public policy on issues pertaining to the sector, it is imperative that there is sufficient representation from all relevant stakeholders at the meet.”

Dr Singh reiterated the importance of tobacco as a commercial crop given India’s position as a top global exporter of tobacco and the world’s second largest producer:

”The sector has a huge socioeconomic impact as there is a vast livelihood dependency of 45.7 million people right from tobacco farmers and farm workers to small, self-employed retailers, besides being an important source of tax revenue for the government.”35

The Ministry rejected all requests, although did agree to meet with the farmers after COP7. 36 The push to ensure that Indian tobacco farmers and the general public were not excluded from observing the FCTC COP7 proceedings was a tactic exposed in a leaked Philip Morris International 2014 strategy PowerPoint presentation exposed by Reuters in 2017. The same document also includes PMI’s description of the FCTC as a “regulatory runaway train” and Indian Prime Minister Narendra Modi as a prime lobbying target to prevent him taking “extreme anti-tobacco measures”. 37

Giving Tobacco Companies Prestigious FICCI Awards

FICCI has handed out prestigious awards to Godfrey Philips: one in 2014 for its Ghaziabad cigarette factory (FICCI Quality Excellence Gold Award for Manufacturing) and another in 2019 (FICCI Gold Award for Quality Systems), among others. 38
It also anointed ITC Ltd in 2012 with the 12th Businessworld FICCI CSR Award in Large Enterprises, which “recognises the most socially responsible Indian corporates in CSR”. Other awards to ITC were a FICCI Award for Outstanding Achievement in Rural and Community Development, presented by the then Finance Minister, Shri Pranab Mukherjee in 2010, and in 2008 the FICCI Outstanding Vision Corporate Triple Impact Award, presented by the then Prime Minister, Dr Manmohan Singh. 39

International Partnerships

In 2019 FICCI became a strategic partner of the Commonwealth Enterprise and Investment Council (CWEIC). Dr Jyotsna Suri is the nominated FICCI Advisory Council member to CWEIC, which is based in London. She is a FICCI Past President (2015) and the Chairperson & Managing Director of Bharat Hotels which runs the luxury hotels chain “THE LALIT” under The Lalit Suri Hospitality Group. 40

TobaccoTactics Resources

Relevant Links

References

  1. Federation of Indian Chambers of Commerce & Industry, FICCI, website, undated, last accessed December 2019
  2. Federation of Indian Chambers of Commerce & Industry, FAQS, website, undated, last accessed December 2019
  3. abFICCI, Team Anil Rajput, website undated, accessed December 2019
  4. abcAnil Rajput, LinkedIn, accessed December 2019
  5. FICCI, https://web.archive.org/web/20191210041919/http://ficci.in/sector-chair-co-chair.asp?sectorid=24 Sector Chair – Co-Chair IPR Committee, accessed December 2019
  6. FICCI CASCADE, Anil Rajput, website, undated, accessed December 2019
  7. ITC, https://web.archive.org/web/20191210133623/https://www.itcportal.com/about-itc/leadership/board-of-directors/sanjiv-puri.aspx Sanjiv Puri, website, undated, accessed December 2019
  8. FICCI, Fast Moving Consumer Goods Sector Overview, website undated, accessed December 2019
  9. Godfrey Philips India Ltd, Company: Who We Are, undated, accessed November 2019
  10. MarketScreener, Godfrey Philips India Limited, accessed November 2019
  11. Modi Enterprises, People Behind the Group, website, undated, accessed December 2019
  12. FICCI CASCADE, About Us, website, undated, accessed November 2019
  13. FICCI CASCADE, Mandates of CASCADE Committee, accessed December 2019
  14. FICCI CASCADE, Awareness Through Art Painting Catalogue, 2012, accessed December 2019
  15. Tobacco Institute of India, FICCI Movement Against Smuggled and Counterfeit Trade, website, December 2018, accessed November 2019
  16. FICCI MASCRADE 2019: Counterfeiting is cancerous to society; need constant vigilance: SC Judge Uday Umesh Lalit, press release, 30 September 2019, accessed November 2019
  17. Twitter, accessed December 2019
  18. Twitter, https://twitter.com/HuwwatkinsIPO/status/1177075509592829953 Huw Watkins, accessed December 2019
  19. Huw Watkins, Linkedin, accessed December 2019
  20. FICCI CASCADE, tank Members, website, undated, accessed December 2019
  21. PC Jha, Illegal trade a speed breaker, The Pioneer, 12 October 2019, accessed December 2019
  22. FICCI CASCADE, ‘Invisible Enemy: Impact of Smuggling on Indian Economy and Employment, 2019, accessed December 2019
  23. Press Trust of India, Enhance awareness to check illicit trade: Ficci-KPMG report, The Times of India, 12 October 2017, accessed November 2019
  24. Press Trust of India, 90 per cent rise in consumption of smuggled cigarettes in India, Indian Express, 13 October 2016, accessed November 2019
  25. A. Ghosh, Just 3 per cent of cigarette trade in India illicit: Study differs from industry claims, The Indian Express, 18 January 2018
  26. RM John, H Ross, Illicit cigarette sales in Indian cities: findings from a retail survey, Tobacco Control 2018;27:684-688, accessed November 2019
  27. abSTOP, Crooked Nine: Nine Ways the Tobacco Industry Undermines Health,19 September 2019, accessed February 2020
  28. Canadian Cancer Society, Cigarette Package Health Warnings International Status Report, 5th Edition, FCTC website, October 2016, accessed December 2019
  29. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1868456/ Communicating Risk to Smokers: The Impact of Health Warnings on Cigarette Packages Am J Prev Med. 2007;32(3):202–209. doi:10.1016/j.amepre.2006.11.011, accessed November 2019
  30. abA. Ghosh, https://indianexpress.com/article/explained/85-per-cent-warning-on-tobacco-packs-how-the-battle-continues-in-the-courts-5024626/ 85 per cent warning on tobacco packs: How the battle continues in the courts, Indian Express, 15 January 2018, accessed November 2019
  31. Press Trust of India, Cigarette smuggling to hit tobacco farmers hard: ASSOCHAM, 11 March 2008, accessed November 2019
  32. Press Trust of India, https://timesofindia.indiatimes.com/city/delhi/CII-FICCI-oppose-85-pictorial-warning-on-tobacco-products/articleshow/52223523.cms CII, FICCI Oppose 85% Pictorial Warning On Tobacco Products, The Times of India, 11 May 2016, accessed November 2019
  33. Economic Times, Tobacco products to carry pictorial warning on 85% of packaging space: SC, 14 August 2018, accessed November 2019
  34. Express News Service, https://web.archive.org/web/20161128095733/https://indianexpress.com/article/india/india-news-india/india-has-third-largest-pictorial-warnings-on-tobacco-products-4369083/ India has third largest pictorial warnings on tobacco products, Indian Express, 11 November 2016, accessed November 2019
  35. Press Trust of India, Invite tobacco industry bodies in COP7 meet: FICCI, ASSOCHAM, India Today, November 4, 2016
  36. IANS, Health ministry says ready to talk to tobacco farmers, but not at COP7, 7 November 2016, accessed November 2019
  37. PMI, 2014 Corporate Affairs Approach and Issues, accessed November 2019
  38. Godfrey Philips, Annual Report 2018-19, website, accessed December 2019
  39. ITC Ltd, Global Honours, website undated, accessed December 2019
  40. Commonwealth Enterprise and Investment Council,
    Strategic partners, website undated, accessed December 2019