HYDERABAD: Human hair exporters and processors from India have unearthed a scam where Chinese nationals are smuggling out human hair from Hyderabad to China, via Myanmar. They have alleged that a bunch of Chinese importers have made Hyderabad the hub of the illegal trade by under-invoicing hair to evade import duty in Myanmar and China. The Indian exporters have written to the Directorate of Revenue Intelligence (DRI) to crack down on the illegal trade running into crores.
Analysis of shipment data of raw human hair from Hyderabad air cargo to Myanmar revealed huge under-invoicing as well as to get the rest of the money through hawala, mainly in the form of gold.
An alert note from the Kolkata customs department sent to Hyderabad and other zones, says, “It has come to notice that certain exporters are artificially decreasing value of export consignments of human hair (goli/thutthi/choti) to Myanmar, Bangladesh and Vietnam.”
The note adds that the modus operandi adopted by traders mostly in West Bengal and Telangana is to deflate procurement price of export quality raw human hair. “The objective is to under report foreign exchange to escape FEMA compliance and income tax and also to smuggle Indian origin human hair to China via land routes to escape close to 28% Chinese import duty,” the note says.
Human hair is bought in auction from temples, church shrines in Andhra, Telangana and raw hair (goli) collected from domestic households and saloons, before being smuggled out. Smugglers are also believed to be taking the train route to Kolkata or Guwahati from Secunderabad and then on the road to Myanmar.
Export data from Hyderabad air cargo between April 1, 2018, and March 31, 2019, revealed that the average price per kg of hair ranged from $2 to $ 62 for unworked human hair. The total raw hair exports during this period was Rs 26 crore from Hyderabad air cargo. Between April 2017-18, exports had been worth Rs 42 crore while in 2016-17, it had jumped to Rs 132 crore.
There was a sudden boom in exports from April 2020 to November 2020 where Rs 33 crore worth of raw human hair was exported. It is suspected that the actual worth would 25 times more than the invoiced quantity. Using trains, the amount of human hair smuggled is 20 to 30 times more than that is going by air cargo.
Human Hair and Hair Products Manufacturers and Exporters Association of India, in a written communication to DRI said, “Chinese and Korean factories have been importing semi processed hair legally from India. China gives an export incentive of 9% if the locally available Chinese hair is used. Some unscrupulous Chinese nationals figured out ways to smuggle raw hair from Myanmar borders.”
Raw human hair is exported at $2 to $60 per kg with an average of $15 per kg, whereas the current market price would be $75 to $80.
Investigations revealed that exporters are buying genuine hair from temples like Tirupati, Kanaka Durga and Gunadala Matha church in Vijayawada, Simhachalam and Yadadri temples and are selling it for a higher price instead of processing it. The same is either smuggled or sent to Myanmar legally but is under-invoiced. Hair collected from non-religious places is smuggled out.