Delhi is a hub of counterfeit products: ASSOCHAM

06 August, 2012

The widespread sale of counterfeit products such as electronic items, automotive components, consumer durables, pharma, herbal medicines and cosmetics has become highly alarming. Moreover, the national capital Delhi has become the hub of counterfeit products in India as nearly 75 per cent counterfeit products originate here, as per a report by the industry body Assocham.

THE COUNTERFEIT products may capture a market size of Rs 55,000 crore through illegal channels by 2013, according to estimates made by industry lobby group, the Associated Chambers of Commerce and Industry of India (Assocham).

On account of increasing sale of fake products in the absence of regulatory mechanism, the revenue losses to the exchequer would have exceeded Rs. 5,000 crore for fiscal 2011-12. “The sale of contraband electronic items, consumer durables, automotive components, pharma, herbal medicine & cosmetic products amounts up to Rs. 25,000 crores during the fiscal 2011-12. The present market size of the fake products is around 45,000 crore,” said DS Rawat, Secretary General, Assocham.

The other areas in which spurious products sale is going unabated comprise of vegetable oils, spices, ghee and even watch components. In these areas of large economic activities, the fake products sale has been estimated within the range of Rs 15,000 crore by 2013.

In a paper on Fake Products Sale, prepared by Assocham, based on the feedback of its constituents, it has been stated that electronic, consumer durables and pharma sectors have witnessed the highest sale of fake products with an estimated amount of Rs 20,000 crore in the current fiscal.

In pharma sector, fake medicines were sold off in rural and semi urban markets, the cost of which works out to be Rs 12, 000 crore with growth of over 100%.

The estimates also point out that Rs 8,000 crore worth of fake products were sold off in the category of vegetable oils, ghee, spices & watch components by 2011-12. Of this, the large chunk came from the sale of fake watch components which has been estimated at Rs 5,000 crore. The genuine manufacturers of watches had to lose out heavily because of huge price differential.

Herbal Medicine & cosmetics sector alone registered a sale of another Rs. 10,000 crore in 2011-12, which did a great deal of damage to its consumers. The most popular counterfeit market is clothing, followed by shoes, watches, leather goods, and jewellery.

The customers' attraction towards these pirated products is directly proportional to their prices, which are sold at 40 to 45% lesser value than the original and it has become the biggest cause of concern. A common man with limited knowledge falls for the counterfeit products due to its cheap or discounted prices. Enforcement of laws against counterfeiting is not so strict in India which is another big jolt for the branded industry.

The industry body said that the laws in India to curb the practice of selling fake products are not effective, which in turn are encouraging the offenders.