Counterfeits to hurt India's manufacturing sector: A report

The activities of counterfeiting and smuggling are presenting a bigger challenge for enforcement authorities and governments globally and in India. As per World Customs Organisation’s (WCO) estimates, approximately 3 billion pieces of counterfeit and pirated products were seized in 2013. Of these, more than half of the reported goods were illicit pharmaceutical products (2.3 billion pieces), followed by electronic appliances (470 million pieces), other taxable products (95 million) and foodstuff (50 million), amongst other commodities. For other industries such as tobacco, a significant rise in illicit trade have been reported. It indicated that in 2012 the illicit trade, rose to 40 percent making tobacco trafficking, a serious issue for customs organisations.
   
In India, the presence of counterfeit is specifically high in FMCG packaged foods, personal goods, mobile phones, alcoholic beverages, bottled water, pharmaceuticals, etc, causing billions of rupees of losses to industry and the government. It is estimated that the direct and indirect loss to the government from counterfeit goods was at Rs 392 billion in 2014 compared to Rs 130 billion in 2012. According to a report by FICCI CASCADE (Committee Against Smuggling & Counterfeiting Activities Destroying Economy), illicit market in seven select manufacturing sectors, including fast moving consumer goods (FMCG), tobacco, alcohol and mobile phones, led to a loss of Rs 39,239 crore during 2014.
 
Online marketplaces have become a preferred hub for illicit operators owing to their wider reach and ease of access. E-commerce in India is growing substantially with increased traction of mobile telephony, rising internet penetration and disposable income levels.
In recent time, e-commerce has emerged as a major channel for illicit trade, informed Najib Shah, Chairman, Central Board of Excise and Customs (CBEC).
 
Experts believe in the absence of a specific e-commerce legislation in India and other laws including the Information Technology Act, Indian Contract Act, Companies Act, 2013, intellectual property, laws in copyrights and trademark, etc, there are certain grey areas. Thus, there is need for a separate e-commerce law in the country.
 
The launch of ‘Make in India’ initiative by the government intends to transform the country into a manufacturing hub. The plan has witnessed early success and has attracted foreign investments. The campaign, needless to mention, requires authentication of products to protect it from the perils of counterfeiting and ensure making it a complete success in the times to come.
 
“Given the emphasis on the current ‘Make in India’ campaign bringing in economic development and the much anticipated growth; an effort therefore needs to be made to strengthen laws and curb illicit trade practices for industry to grow and thrive. What is needed is an orchestrated strategy with participation from policy makers, industry, civil society and organisations, to work together and comprehensively address this complex challenge,” said Dr A Didar Singh, secretary general, FICCI.