Paan’s dark supply chain: How Rs 120-crore khair smuggling network spread its tentacles

Katha, an extract derived from Khair tree heartwood, is a key ingredient in paan consumed across India. In Western Odisha forests, this tree heartwood has become part of an alleged Rs 120 crore interstate smuggling network, according to Chhattisgarh Police. The operation was uncovered on June 17 when Mahasamund district police intercepted a truck from Odisha carrying 23,350 kg of khair wood intended for katha-making businesses in Himachal Pradesh.

The truck's National Transit Pass System (NTPS) clearance certificate, supposedly issued by the Forest Department in Kurnool, Andhra Pradesh, turned out to be a forgery.

Since then, multiple raids in Chhattisgarh, Haryana, Odisha, Himachal, and Madhya Pradesh have led to the seizure of over 50 tons of khair wood within two months, and the arrest of 12 suspects. Superintendent of Police Prabhat Kumar reported the case, stating that a case has been registered against the accused for organised crime, cheating, forgery, and criminal conspiracy under various sections of the Bharatiya Nyaya Sanhita and the Indian Forest Act, 1927.

At the centre of this alleged network is Manish Agarwal from Sarsiwa, Chhattisgarh. Police seized Rs 81 lakh in cash from his premises on September 7, and he has since obtained anticipatory bail from the High Court. Agarwal, named in multiple FIRs and forest offence reports, was arrested by Raigarh police this month in a separate khair wood smuggling case from the previous year.

Eight shell firms were allegedly used to generate fake invoices worth Rs 120 crore over two years, and more than 10 mule accounts were involved in moving and laundering the proceeds. The wood was sourced from various Odisha districts and parts of Chhattisgarh, passing through five other states before reaching Himachal Pradesh via Haryana.

The complex logistics of this operation — involving six states, five routes, eight shell companies, and a duration of two years — raises questions about its long-standing evasion of detection.