Nearly Rs1000 crore loss on account of counterfeiting

Nearly Rs1000 crore loss on account of counterfeiting
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First Published: Thu, May 10 2007. 04 29 PM IST
Updated: Thu, May 10 2007. 04 29 PM IST
New Delhi: Fabric manufacturers, especially in suitings and shirtings are losing over Rs 1000 crore per annum on account of counterfeit fabrics that are sold in the country under the original brand names of genuine manufacturers according to Assocham.
In a Study on Rs.Combating Counterfeiting: Brand Protection’ which will be released in New Delhi by Justice Vikramjit Sen, Judge, Delhi High Court, it points out that other expensive counterfeit products like gear parts, oil seals, filters, gaskets and brake liners are flooding the market with an estimated adverse impact of 25-30% to their genuine manufacturers.
Findings
Smuggled cigarettes in India are estimated at Rs1700 crore in value and account for 5 - 7% of the market. Estimated revenue loss is to the tune of Rs1500-2000 crore in the form of unpaid duties and forex outflow.
Petroleum adulteration is estimated to be worth more than Rs15000 crore and kerosene meant for distribution under Public Distribution System (PDS) which is often used for adulterating petroleum.
Counterfeit automotive parts worth appox Rs200 crore are sold annually in India , constituting nearly 35% of the market share of automobile parts. These counterfeit parts are of low quality and hence the consumer’s safety is usually at stake.
Fake food colours which are injurious to health further impact the industry to the tune of Rs 10 crore. The annual financial impact on the entire fabric industry that goes into making of suitings and shirtings is Rs 1000 crore and the way this menace is increasing, the impact is going to be more in future in line with the proposed increase in business activities.
Original manufacturers of all branded fabric companies have reported that the trail under the TM Act, Copyright Act is not as fast, comprehensive and stringent as it should be. As a result, culprits get away scotfree or are not punished hard enough.
The Study also take note of counterfeit currency notes and stamps by highlighting that certain racketeers are offering high interest rates against cash deposits, particularly to gullible villagers. On maturity, they are given counterfeit currency.
It concludes that 61% of computer software sold in the market is pirated since the price of genuine software is so high that the end user finds it difficult to afford it and hence resorts to pirated version of the software.
Recommendations
* A tribunal type of authority should be created, comprising experts for presiding over proceedings and delivering of judgments like sales tax, excise and customs as in remote areas, this subject is new for the lower judiciary.
* Rampant duplication affects India’s reputation in area of IPR protection. Changes in law, trial, rules and procedures can help check this menace of duplications.
* In a bid to curb and prevent duplicay in gear parts, oil seals, filters, gaskets, brake liners and other parts like packaging material, part number specification stickers etc., a new legislation is called for that can appoint special courts for pronouncing stringent punishments for those that indulge in such nefarious activities. 25-30% of annual loss is reported through fake sales of the aforesaid parts for their original manufacturers.
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First Published: Thu, May 10 2007. 04 29 PM IST
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