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Fake products thrive in India

Assocham is seting up a cell to monitor activities related to the sale of fake products, reports Srinand Jha.

india Updated: Oct 09, 2006 21:08 IST

Posting of record annual sales of fake products at Rs 15,000 crore this year ought to have been distressing enough but the news is even more grave: The country’s trade in spurious goods is on an exponential trajectory of growth.

Unless immediate monitoring/regulatory mechanisms are put in place, sales of counterfeit products will touch a staggering Rs 22,000 crore by 2010.

The revenue loss to the country by way of evasion of excise and local taxes - estimated at Rs 1250 crore in March 2006 - will climb up to Rs 2000 crore by then, according to a study conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Products of virtually all major companies are being faked and sold in the open market. Among the companies hit by the trend are Ranbaxy, Hindustan Lever and Colgate Palmolive (Pharmaceutical sector); Pepsi, Britannia, Quality Foods and GD Foods (Food Processing); Eicher, Mahindras, Bajaj and Maruti (automobile spares) besides Titan, Tizza, Raddo and Timex (Watch components).

Makeshift factories have proliferated in recent years at locations such as Sonepat, Ghaziabad, Panipat, Meerut and Ballabhgarh and the NCR region has emerged as an 'illegal manufacturing hub', the study points out.

Phoney substitutes of common medicines being illegally manufactured and sold - as also live saving drugs - are stated to include anti-plague serum, Aspirin, Paracitamol, Dispirin, Amrione, anti-human lymphocyte, Immuniglobin, Cobalt-60 and BCG vaccine.

The Industry body’s report - recommending the setting up of a joint mechanism between the Central and state governments besides the enactment of a legislation on the subject - will be submitted to all Chief Ministers in addition to the Ministry of Consumer Affairs early next month, Assocham Secretary General DS Rawat told Hindustan Times.

The existing monitoring mechanism is stated to be the weakest in Uttar Pradesh, while states like Haryana, Maharashtra and Tamil Nadu are also seen as not having done enough to discourage the practice.

For its own part, the Assocham plans to set up shortly a counterfeit cell for monitoring activities relating to the manufacture and sale of fake products.

With scores of products being expected to get 'off-patent' following decisions of the US and South African Governments to de-regulate pharma and herbal products, an opportunity for higher exports in these sectors is stated to have opened up for the Indian Industry.

"Unless major steps are initiated to put an end to the phoney trade, such prospects will be heavily compromised," said the Nicholos Piramal Limited Director, Harinder Sikka.

Because of the absence of effective regulatory laws to curb illegal manufacturing, a question mark continues to loom large even on genuine Indian suppliers, he added.