Counterfeited Products: Stunting the Growth of Indian Economy

You get up in the morning, brush your teeth with Colgate, have Brook Bond Tea, wear your Levi’s Jeans and carry your Gucci bag with your Apple iPod. But do you realize almost all of these products could be counterfeit products? Whether it is adulterated medicine that can kill you, bogus batteries that can burn you, or wannabe Gucci that simply wears out fast (though you may look stylish for a while), counterfeit merchandise is everywhere. In 2006, a record year for seizures, 14,000 shipments of counterfeit merchandise were confiscated. Figures for 2007 were high as well. Because today’s fakes are not just the usual knockoffs, you need to take special precautions when you shop.


Well, let me emphasize on facts first, it will help in gauging the problem and understand the magnitude of problem. Fakes include truly unsafe merchandise. Investigators have seized brake pads made of kitty litter, sawdust, and dried grass; power strips, extension cords, and smoke alarms with phony Underwriters Laboratories (UL) marks; medical test kits that give faulty readings; toothpaste made with a chemical found in antifreeze; and cell-phone batteries that could explode. Online drugstores claiming to operate from Canada but actually based in other countries have peddled “Lipitor” and “Celebrex” pills stored under uncontrolled conditions and containing the wrong active ingredients. And that is just for starters. The problem is intense, as suggested by the following figures found by a survey carried out by a US agency. Worldwide, 10 per cent of perfumes and cosmetics, 11 per cent of clothing and footwear and around six per cent of drugs bought by consumers are fakes. The figure rises to a staggering 80 per cent in some developing countries.


In Delhi itself, one finds counterfeit handbags, clothes, watches etc. The producers cleverly change the font size or make small changes in the logo. These changes are small and often go unnoticed. For example, colognes are amusingly renamed such as Essey Miyami instead of Issey Miyake. Shirts have the Nike logo of a tick mark but the other way around. Some items are priced very close to the retail price to fool the consumers. Consumers knowingly and unknowingly purchase these products. These products are cheap and easily available making them a tempting option for purchase. A Yahoo search for “cheap Gucci handbags” returned almost 1 million results, including ads touting prices too good to be true. Truth is that Gucci discounts only at its factory outlets and rarely at its regular stores.


Not only are these exclusive goods targeted but also are the regular items of use. It is important that the consumers understand the magnitude of problem. A word for those who buy these counterfeit products unknowingly ,it is a well known fact that the chances of a counterfeit product being sold is high with the peddlers standing at the road side instead of well established stores. And for those who buy it knowingly, I advise them to not to continue with the habit. Most knowingly customers purchase pirated movie CDs, download songs from the net and buy clothes with the logos of famous brands from Sarojini Nagar only because they are cheaper, satisfy the need and yet no one gets to know that a counterfeited product is being used.


This problem is witnessed not only in India, but rest of the world too. France’s Union of Manufacturers (Unifab), an industry group, also sued eBay and other auction sites, for selling counterfeit products on their web pages. EBay was accused to having sold 2,35000 counterfeit articles of leather goods maker Louis Vuitton on 340 eBay pages leading to a loss of millions of euros.


Customers do not realize that this practice is eating into the growth of our country. The biggest source of counterfeit products is China and a FICCI survey has estimated the loss of revenue to the Indian exchequer by way of taxes to be roughly around Rs 1,000 crore a year. Also, a FICCI estimate has put the annual loss of revenue to the Indian companies in excess of Rs 4,000 crore.


Talking about basic products used daily, Lux, Dove, and Fair and Lovely are the three most counterfeited brands according to Jayant Deshpande, Manager of Hindustan Unilever Limited. Customers must rate quality more than the price they are paying for it. If they buy the originals, the assurance of using a good quality product should be an incentive enough to pay a little higher price. China is the most active source of sending counterfeit products and substandard products. They export these goods to India through Kolkata and Chennai; and Delhi does not lag behind in making these products easily available. A news article in the Times of India, dated 8 June 2009 talked about how China has been exporting substandard medicine to Nigeria labeled ‘Made in India’.


The government has also taken this problem quite seriously, and in an effort to take an aggressive stance against the mammoth issue of counterfeiting, the Federation of Indian Chambers of Commerce and Industry (Ficci) Brand Protection Committee has collaborated with the Global Anti-Counterfeiting Group (GACG) to make India a pilot project to combat the problem, which has been described as an activity linked to crime.


Hence, it is important that we understand how this business of counterfeit products is eating into not only Indian Revenue but also Indian reputation. It can only be fought through vigilance and the decision to not to buy these products.


Akshita Agrawal

[Image source:]