BP Desk
A shocking new study by Insight Metrics has uncovered an alarming surge in Bangladesh’s illicit tobacco trade, exposing a sprawling underground network that’s growing at an alarming rate.
This isn’t just petty smuggling or distribution of fake products, it’s a full-blown criminal enterprise network, thriving in plain sight and costing the nation dearly.
Illicit cigarettes now make up 13.1% of the market—an explosive 31% jump from last year. That’s over 832 million illegal sticks flooding the streets every month, fueling a growing public and economic crisis.
The bulk of this black market is dominated by Illicit Whites – locally manufactured illegal cigarettes bearing fake, reused or no tax stamps, while contraband - foreign brands make up the rest, smuggled in without paying a single taka in duties.
Experts estimate that the government is losing far more than the NBR’s stated figure of taka 2,000 crore annually. In reality, the loss could be double or even higher, as the illegal trade continues to expand unchecked.
Contrabands are smuggled through unofficial, shadowy channels that bypass the country’s crushing import taxes for cigarettes of around 600%. This deliberate tax evasion is criminal, allowing these illegal operators to skip legal prices, rake in massive profits, and leave the government hemorrhaging thousands of crores in lost revenue.
But the damage has not stopped at the treasury. These cheap, illegal cigarettes are rapidly becoming the product of choice for low-income communities and vulnerable youth, driving up consumption rates. The inability to afford legal products while illegal products stay affordable and available works like a sweet trap.
Even more disturbing is the blatant disregard for Bangladesh’s tobacco control laws. Most of these products carry fake or no tax stamps, evade quality checks, and are often churned out in unregulated, hidden facilities. Public health experts are sounding the alarm: these illegal cigarettes may contain unverified, potentially more toxic ingredients, posing grave risks to consumers.
The open reuse of tax stamps has become normalized in retail shops across the country. Retailers are collecting stamps from legitimate cigarette packs and funneling them back into the illegal supply chain—a brazen system hiding in plain sight. These retailers are knowingly or unknowingly becoming a key player in this underground empire.
According to the study, more than 15% of shopkeepers are actively incentivized by illicit suppliers, lured by free gifts, pack discounts, and extra sticks while others are motivated by the high profit margin they get by selling the untaxed products. These perks make it highly profitable to stock illegal brands, collect used tax stamps, and encourage retailers to brazenly ignore the government’s mandated floor prices.
Over 82% of retailers reported a smooth, uninterrupted supply of illicit cigarettes, revealing a well-oiled distribution network that is operating with alarming efficiency. Dhaka and Chattogram have become the epicenters of the illicit cigarette trade, driving both market share and supply.
Mymensingh and Bogura have also emerged as key hotspots. Contrabands like Oris, Mond, Partron, XSO, and Esse are dominating the retail shelves, where Oris alone is reportedly selling over 50 million sticks per month—a staggering figure that underscores the scale of the crisis.
Meanwhile, locally manufactured brands such as Pushpa, T-20, City Gold, and Polo which are being sold far below the government’s minimum price, are flooding the market. These unregulated products are rapidly displacing legitimate, tax-paying brands, severely undermining public revenue and regulatory control.
Media investigations have unearthed deep-rooted corruption and industrial-scale smuggling. As reported by several media sources, Companies like Bijoy International Tobacco and Tara International Tobacco, have been tied to the import of 5,906 tons of raw materials through phantom firms - enough to produce 295 crore cigarette sticks, dodging an estimated taka 1,500 crore in taxes.
In just 16 months, customs and intelligence agencies have seized over 61 crore illicit cigarettes. Between January and June 2025 alone, the government lost more than 58 crore taka due to illegal cigarettes, contraband, and counterfeit tax stamps which have been confiscated.
And these figures represent only a fraction of the actual scale—captured from limited operations and recorded incidents.
Speaking anonymously, a customs official revealed: “We only act when we receive a tip-off. The reality is, a vast portion of this illegal trade slips through the cracks. We give our best, but our capacity limits us to the bare minimum.”
Law enforcement continues to fight valiantly, conducting raids and confiscating millions worth of illegal products. But the reality is grim: limited resources and manpower mean most of the illicit trade goes untouched, slipping through the cracks and flooding the market.
Meanwhile, consumers - especially youth and low-income groups - are being seduced by cheap, foreign-branded cigarettes, while legal products remain out of reach due to steep tax and price hikes. The result is a booming black market, a crippled legitimate industry, and a public health disaster in the making.
With tobacco contributing around 30-35% of Bangladesh’s VAT revenue, the rise of illicit products is a direct assault on the nation’s fiscal stability. Experts and industry insiders commend the enforcement efforts, but they’ve long warned that the current tax and pricing structure and steep price increases are inadvertently nurturing this criminal ecosystem.
A united front can bring hope for a solution. A collaboration between public and private sectors is urgently needed to dismantle the roots of this illicit empire. Only then can Bangladesh protect its revenue, safeguard public health, and reclaim control from the shadows.
Until then, cheap, unregulated cigarettes will continue to pour in, endangering lives, crippling the economy, and dragging the nation further from its development goals.
