[Top-Stories] ‘Hairy’ racket exposed in money laundering probe against Chinese apps New Delhi: The ongoing “trade” relationship between a section of businessmen in India and China is likely to appease those battling for a ban on the sale of Chinese goods in the country. Enforcement Directorate sources say a racket in human hair – supplied to the Chinese from Indian traders – is thriving. Officials said there has been tax evasion on both sides and possibly in countries where the finished product is running out. The supplies are coming from parts of Andhra Pradesh and Telangana and go through Kolkata and North East. Some of the catalysts in this underground trade are the people of Myanmar. The agency stumbled upon the racket during an investigation into money laundering by Chinese online betting applications. The officials found traces of hawala payments worth Rs 16 crore, which they traced from human hair dealers. The payment was made through the Paytm accounts of the parent companies of the illegal Chinese apps. The ED said in a media release today that the agency has found that domestic traders are collecting and selling human hair to foreign traders based in Hyderabad, Guwahati and Kolkata. The stock is then smuggled into Mandalay, Myanmar through border points at Moreh (Manipur), Jokhawthar (Mizoram), and Aizawl (Mizoram), and from there to China. In China, the stock is reportedly being processed and processed into “Chinese hairs” – traders there are managing to avoid import duties of up to 28 percent. The agency said counterfeit labeling is also helping them earn 8 per cent export incentives. The agency suspects that many Indian exporters are also undervaluing the material to help the recipient traders. It was found that two traders from Hyderabad received Rs 3.38 crore in return for sales in the Northeast – through Paytm accounts of parent companies of the illegal Chinese app. The ED observed that some Myanmar citizens were permanently posted in the capital of Telangana. They bought human hair locally and reportedly exported it using import-export codes of Indian entities. According to the press release, during the search operation, the agency seized 12 cell phones, three laptops, one computer, hand written diary, rough account book and incriminating documents. Unaccounted cash worth Rs 2.9 crore was also recovered from some traders. A case has been registered against the traders residing in Telangana and Andhra Pradesh under the Foreign Exchange Management Act.