'Ethical' product certification catching on in India
Indian brands are taking the first step towards following Fair Trade, a concept popular amongst Western consumers that preaches buying products from corporations that focus on sustainable development and offer better trading conditions for workers and producers.delhi Updated: Apr 11, 2010 11:57 IST
Indian brands are taking the first step towards following Fair Trade, a concept popular amongst Western consumers that preaches buying products from corporations that focus on sustainable development and offer better trading conditions for workers and producers.
"Fair Trade is a win-win for all stakeholders, including corporates, producers and consumers. While corporates get brand respectability, producers get their due return and the consumer has the satisfaction of buying a product which is ethically made and environment-friendly," Shop for Change Advisor and Acting CEO Seth Petchers told PTI.
Shop for Change is a non-profit organisation offering Fair Trade certification in India. It has already certified a range of T-shirts made by Kishore Biyani-led Future Group's private label, 'Mother Care.'
He said Shop for Change is likely to bring on board at least 10 brands in India this year and diversify into new business segments like food and beverages for its certification services.
While globally, consumers spent USD 4.1 billion on Fair Trade products in 2008, India, with its huge and growing market and an expanding retail industry, is not yet familiar with the system, although experts say the potential here is immense.
Global consultancy firm KPMG said that Fair Trade in India could even surpass the sales figures in Western nations in years to come.
"It will help in the growth of the organised retail market and in India, with its huge unorganised sector, even small retailers can avail of it. Fair Trade has a ready market in India and we only need some effort to make it popular," KPMG Advisory Services Manager Anand Ramanathan said.
Fair Trade requires both producers and corporates to follow a set of rules, which makes it mandatory for representative bodies of workers to be trained in modern techniques and calls for reducing production costs, abstaining from the use of harmful chemicals and ensuring good working conditions to ensure sustainable development.
As the concept became popular in the West, it added to brand equity of those corporates certified for Fair Trade, as it meant they were committed to transparent contracts and fair payments for workers or farmers. Futhermore, it meant they did not use middleman during purchases.
Corporates in India seem to have woken up to the idea and its possibilities. "The concept has a future, but it will take time. We also want brand respectability, specially with the increase in consumer awareness," a senior official of a Delhi-based retail firm said.