Narcotics Trade Fuels Punjab's 'Black Economy', Study Finds

A study conducted by the Thapar School of Liberal Arts & Sciences and the Institute for Human Development has found that the narcotics trade is the most visible and economically far-reaching force driving Punjab's 'black economy'. The study, titled 'The Black Economy in Punjab-2026', notes that the state's 553-km international border with Pakistan and its vast network of canals and rivers have made it a critical transit corridor for the cross-border trafficking of heroin and other opioids.

The study's authors, including Deepratan Singh Khara, Lakhwinder Singh, and R.S. Sidhu, highlight that the economic footprint of the narcotics trade extends beyond the direct value of narcotics, generating a parallel system of financial flows that permeate sectors such as real estate, informal credit, and political financing.

According to the study, the scale of narcotics trafficking in Punjab is most reliably inferred through seizure data, with aggregate estimates for the period 2015 to 2024 suggesting total seizures in excess of 2,17,000 kilograms and heroin recoveries exceeding 4,600 kilograms.

The study's findings indicate that the narcotics economy in Punjab is sustained not only by supply-side dynamics but also by a broad and socially embedded demand base, with substance dependence concentrated among younger, underemployed males with limited educational attainment. The state government and law enforcement agencies are expected to respond to the study's findings, with potential next steps including increased efforts to combat narcotics trafficking and address the underlying socio-economic conditions that drive the 'black economy'.