FICCI - CASCADE Federation of Indian Chambers of Commerce and Industry (FICCI)

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COUNTERFEITING IN INDIA

- MR. ANIL RAJPUT, CHAIRMAN, FICCI CASCADE

BACKGROUND

In the recent past, India’s economic growth story has attracted world’s attention, which has brought a new set of challenges for the domestic economy. A few of these are counterfeits, pass-offs and smuggling that are threatening domestic brands and industry. The rapid advancement in information communication and technology is further boosting the growth of such illicit activities. All this is (1) Hurting the integrity of the brand thus eroding sales of the legitimate product; (2) Undermining local industry, Discouraging legal imports; and (3) Reducing volume of revenue collection from duties and levies by the State.

The situation today has become worse than ever. The market for counterfeited products is growing rapidly:

- Counterfeiting is a $650 billion a year problem

- Grown over 10,000 percent in the past two decades

Indian markets today are flooded with goods imported from all over the world both through legitimate and illegitimate routes. An important effect of these illegally imported goods is that they are not only causing a loss to the national exchequer but also forcing our small and medium industries to close down their operations thereby affecting employment growth.

FICCI - CASCADE Federation of Indian Chambers of Commerce and Industry (FICCI)

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SOME FACTS

- It is estimated that the government loses in excess of Rs 2200 crore (as per ACMA) a year due to sales of counterfeit auto components. This figure is just for one sector, this problem of illicit trade prevails in every sector be it Pharmaceuticals, Cigarettes and Tobacco, Printer Cartridges, Alcohol etc.

- According to the Report of the FICCI-National Initiative against Piracy and Counterfeiting:

o Share of fake/counterfeit medicines is estimated at 15 - 20% of the total Indian market. As per some estimates, spurious drugs worth Rs. 2500 crores annually are thrown into the market.

o For soft drinks it is at 10% o Fake cosmetics, toiletries and packaged foods at 10-30% o 74% of the software and 21.5% of cigarettes sold in India are

counterfeit

Much of the above estimated quantum of counterfeit goods and supply is attributable to smuggling. However, it is not possible to quantify smuggling and/or trading of counterfeit goods, as much of it remains un-reported, un-detected, and at times, un-noticed as well. Still then, little that is reported is points to an astounding problem ahead of us. For instance, the value of seizures by the Customs over last four years from 2006-7 to 2009-10 portends a serious threat to our economic stability. The estimated value of seizures went up from Rs. 689 crore in 2006-7, to Rs. 1752 crore in 2009-10. Narcotic drugs, computer parts, electronic items, machinery parts, and fabrics/yarn prominently figure in this list. In terms of value, seizures account for approximately 1/3rd of the total detection made by the Customs.

FICCI - CASCADE Federation of Indian Chambers of Commerce and Industry (FICCI)

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FICCI CASCADE With this above scenario in mind, a Committee under the aegis of FICCI, called the Committee on Anti-Smuggling and Counterfeiting Activities Destroying Economy (CASCADE). The objective of this Committee is to sensitize policy makers to this growing menace of contraband and counterfeiting.

FICCI CASCADE AIMS AT - Capacity building of Law enforcement agencies - Discussion on legislation changes in the country - Meeting and influencing the law enforcement authorities to create

constant awareness about the menace of counterfeit - Enforcement of IP related laws - Systematic dissemination of enforcement techniques, procedure and

strategy through regular workshops for the guidance of its members - Sharing the best practices followed globally for countering the

menace of contraband, smuggled and counterfeit product - Provide knowledge support to the industry members in tackling

counterfeit, contraband and smuggled products

COMMITTEE’S WORK

- Joint Publicity Campaign with Ministry of Consumer Affairs under their “Jaago Grahak Jaago” umbrella to create awareness amongst the consumer. Released in more than 160 newspapers nationally on 2nd February 2012

- Awareness campaign with Delhi Government’s “BHAGIDARI” initiative to create awareness amongst consumers on the seriousness of the hazards of counterfeit goods

- Commissioned an India centric research to gather reliable information on the impact of illicit trade in counterfeit goods in core sectors of industry on subject

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- Facilitating Interactions within Industry on information sharing and best practices

- Awareness campaign in 100+ schools in New Delhi, though interactions, creative competitions and rewards

We vision is to encourage every citizen to be a “CASCADER”. We also firmly believe in the philosophy of “catching them young”. The youth of the country are the leaders and policy makers of tomorrow. CASCADE is soon to launch another wave of this movement amongst the young and adolescent members of the society in the new academic year 2012-13.

FICCI CASCADE has been working at the forefront together with Industry, Consumers and Government to generate the much-desired awareness about this problem.