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Smuggling in India Report 2024-25 90

C. Trade Based Money Laundering (TBML)

TBML involves disguising proceeds from criminal activities and transferring
money through trade transactions to legitimise their illegal origins. It typically
occurs through misrepresentation of the value, quantity or quality of imports/ex-
ports. Common methods include over/undervaluation, multiple invoicing, phan-
tom shipping, over/undershipment, and misdeclaration of goods or services.

Case 13: Money laundering by overvaluation of electronic

components
In October 2024, DRI uncovered a fraud in
which six entities imported low-value elec-
tronic components from Hong Kong through
Nagpur and Mumbai air cargo complexes at
grossly inflated prices, facilitating excessive
foreign exchange outflow in collusion with
overseas suppliers. They also evaded customs
duty by using Warehouse Bills of Entry and
storing the goods in bonded warehouses, with
plans to re-export them to Europe and the
Middle East. The estimated overvaluation is
about ₹795 crore.

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