Counterfeiting: A Threat To India's Economy?
A closer look at how replica goods affect local businesses
INDIA. New Delhi: The practice of counterfeiting has been damaging the nation's economy. India loses one lakh crore in taxation every year because of the fake goods market. Many items available in the market or online are counterfeit and it's very difficult to tell from the packaging. They look quite real.
Counterfeiting happens across different industries including fashion, pharma, automobile, and farming, to name a few on the seemingly endless list. Even the national currency has convincing replicas. Public health experts have been actively showing concern regarding the circulation of fake food items in the market.
Impact of the pandemic on the counterfeit market
The world is battling a global health crisis, which has created a larger market for fake goods. In the past six months, many have witnessed a shortage of basic necessities. Face masks and sanitizers of good quality were expensive. Between February and April, numerous cases of faux PPE kits, including masks and sanitizers, were reported across India.
Counterfeit goods online
The past few years have been crucial in terms of digital advancement. Online shopping is one of the new trends for people of every age group. This advancement might seem pleasant, but the reality is more than 30 percent of the pharmaceutical drugs sold online are fake. Millions of people lose their lives every year from counterfeit drugs. An astonishing 20% of all accidents on the road are due to fake automotive parts.
Replicating an item and presenting a copy with the same look and feel is easy business. Finding the authenticity of any product is a challenge for the majority of consumers.
Methods to eliminate the counterfeit market
To fight this, various companies have come up with technologies to detect counterfeit items. Unique QR codes, holograms, and watermarks are used to help stem the flow of fake goods. However, even these have been duplicated.
There are laws that exist to stop counterfeiting.
Section 115(4) of the Trade Marks Act, 1999 provides a special power to police to search and seize any such products which calls for action against infringement of the trademark.
Section 103 of the Trade Marks act penalizes the counterfeiter for applying false trademarks and trade descriptions.
Section 104 of the Trade Marks act penalizes the counterfeiter for selling goods or providing services to which false trademark or false trade description is applied.
A provision to section 115(4) also mandates obtaining a prior opinion from the Register of Trademarks on the facts of the offence.
Finding solutions to a complex problem
Above all, law enforcement needs to do its job. Taxes for these goods must get delivered to the government. Apart from this, companies need to be proactive in helping consumers understand and identify counterfeit merchandise. Hiding the fake market isn't beneficial for the consumer, the government, or the companies themselves.
There is the possibility of using Blockchain to help stem the corruption, but for that to work, all parts of the system need to adopt it. Rest assured, there will be no assistance from the corrupt counterfeit sellers.