Illegal Transactions in Trade and Payments-A Comment

Illegal Transactions in Trade and Payments A Comment Vidya Pitre IN many underdeveloped countries, smuggling takes place on a large scale and is a major problem. There is undoubtedly a need, therefore, to look at smuggling not only as a moral and legal problem but also as a purely economic problem. Estimation of the faked invoicing and of the quantum of smuggling has been attempted by Satyendra S Nayak1 by making use of partner-country data and customs data. His analysis reveals that, in India, there has been a greater tendency to underinvoice imports and exports than to overinvoice them. Thus, over the period 1962-72, the result has been an increase in total demand for illegal exchange on account of the increase in smuggling and import/export invoice manipulations.