Investigations have revealed that exporters are buying genuine human 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.
There was a sudden boom in exports from April 2020 to November 2020 where Rs 33 crore worth of raw human hair was exported. According to a report in the ToI, it is suspected that the actual worth would be 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. The report highlights that a scam has been uncovered where Chinese nationals are smuggling out human hair from Hyderabad to China, via Myanmar.
As such, the Indian exporters have written to the Directorate of Revenue Intelligence (DRI) to crack down on the illegal trade which runs into crores. Moreover, an alert note from the Kolkata customs department sent to Hyderabad states that it has come to notice that certain exporters are artificially decreasing the value of export consignments of human hair (goli/thutthi/choti) to Myanmar, Bangladesh and Vietnam. And 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, in the form of gold.
It also stated that modus operandi adopted by traders, mostly in West Bengal and Telangana, is to deflate procurement price of export quality raw 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.”
Furthermore, the report highlights that 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. 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.
The Human Hair and Hair Products Manufacturers and Exporters Association of India 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.