DRI busts ₹2,500 crore SAFTA misuse in areca nut imports; nine arrested
The Directorate of Revenue Intelligence said on 16 August 2026 it had dismantled a network that imported South-East Asian areca nuts as Bangladeshi-origin to claim SAFTA duty exemption, causing a revenue loss of over ₹2,500 crore.
Summary
The Directorate of Revenue Intelligence (DRI) said on 16 August 2026 that a month-long operation had dismantled a network importing areca nuts from Indonesia, Thailand, Malaysia and other South-East Asian countries by falsely declaring them as of Bangladeshi origin to claim duty exemption under the South Asian Free Trade Area (SAFTA). Areca nut imports normally attract 100% Basic Customs Duty, while eligible SAFTA imports are fully exempt. The goods were routed through an export processing zone in Bangladesh using fraudulently obtained SAFTA Certificates of Origin. Searches in Kolkata and Visakhapatnam led to seizure of about ₹75 lakh in cash and 160 MT of areca nuts; nine people were arrested, a Customs Broker's licence was suspended, and the revenue loss was put at more than ₹2,500 crore.
Key facts
- Agency
- DRI
- Fraud
- South-East Asian areca nuts declared as Bangladeshi origin
- Benefit misused
- SAFTA duty exemption (normal BCD 100%)
- Revenue loss
- Over ₹2,500 crore
- Seized
- About ₹75 lakh cash, 160 MT areca nuts
- Action
- 9 arrested; Customs Broker licence suspended
- Searches
- Kolkata, Visakhapatnam
Practice MCQs 3 questions
Under which trade agreement did syndicates fraudulently claim duty exemption on areca nut imports, as uncovered by the DRI on 16 August 2026?
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Correct answer: A — SAFTA
The syndicates claimed duty exemption under the South Asian Free Trade Area (SAFTA) by mis-declaring the origin of the areca nuts.
In the areca nut fraud uncovered by the DRI in August 2026, the imports were falsely declared as originating from which country?
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Correct answer: D — Bangladesh
The South-East Asian areca nuts were routed through an export processing zone in Bangladesh and passed off as Bangladeshi-origin goods.
Consider the following statements about the DRI's areca nut case announced on 16 August 2026: 1. Areca nut imports into India normally attract a Basic Customs Duty of 100%. 2. The estimated loss to the exchequer is more than ₹2,500 crore. Which of the above is/are correct?
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Correct answer: C — Both 1 and 2
Both are correct. Normal BCD on areca nuts is 100%, whereas eligible SAFTA imports are exempt; the DRI put the revenue loss at over ₹2,500 crore.