ASPA releases report on 'The State of Counterfeiting in India'

The report builds awareness on the economic & societal impact of counterfeiting
ASPA releases report on 'The State of Counterfeiting in India'
The number of counterfeiting incidents in India increased by 20% year to year. The top 5 sectors affected the most are alcohol, tobacco, FMCG packaged goods, currency, and pharmaceuticals. Photo - Chris F from Pexels

Observing the World Anti-Counterfeiting Day on 8 June 2021, the Authentication Solution Providers' Association (ASPA), a self-regulated industry body of Anti-Counterfeiting and Traceability Solutions providers, unveil the latest edition of its report, "The State of Counterfeiting in India - 2021". The aim is to create awareness amongst industry stakeholders in the fight against a fake.

The report studies and highlights the trends of counterfeiting incidents reported in India from January 2018 to December 2020, providing special insight on 2020 incidents. According to the report, counterfeiting incidents have risen rapidly or steadily in the last few years. On average, the increase in counterfeiting incidents being reported in the last three years has been 20% (from January 2018 to December 2020). In 2020 these reported incidents have increased by 17% as compared to 2019.

While counterfeiting is a global menace and no economy in the world has remained unaffected by this menace, the latest trends are alarming for the lives of citizens and the Indian economy. Globally, it now stands at 3.3% of global trade (according to the OECD report) and is impacting countries' social and economic development.

It has been observed that criminals are taking advantage of the high demand for medicines, health supplements, safety products, hygiene products, and other essentials created due to the COVID crisis and contaminating the market by selling fake and sub-standard products threatening the lives of our paramedical professionals, security volunteers, patients and society at large.

In recent years, an uptick in 'unsophisticated' frauds has been noticed. The COVID-19 pandemic has also shown that criminals quickly adapt to the new trade environment and find ways to infiltrate legitimate supply chains with counterfeit and often dangerous products. Professional fraudsters are now using the latest manufacturing and printing technologies to duplicate finishes, print boxes, labels, codes, and packaging that mimics genuine products perfectly. As a result, fakes are almost undetectable to an average consumer. The increasing incidents of fraud, such as diversion, counterfeiting, and black marketing of medicines and other essential items, are further adding more challenges for our healthcare professionals already exhausted due to a shortage of manpower. For example, within the last month, there have been several cases reported of counterfeit Covid-19 medication.

The key findings of the report are as follows:

  • The number of counterfeit incidents in India increased by 20% year to year growth between 2018 and 2020, 17% between 2019 and 2020.

    The top 5 sectors affected the most are alcohol, tobacco, FMCG packaged goods, currency, and pharmaceuticals. Incidents reported in these sectors constitute more than 84% of the total counterfeit incident reported. In addition, there was a sharp spike in crimes related to illicit liquor, smuggling of tobacco products and pharmaceutical products, especially PPE kits and sanitizers, during the Covid-19 lockdown.

  • States including Uttar Pradesh, Rajasthan, Madhya Pradesh, Jharkhand, Haryana, Bihar, Punjab, West Bengal, Maharashtra, and Odisha are amongst the top ten states which need urgent attention in respect to counterfeit incidents requiring more detailed analysis of the issue followed by stringent anti-counterfeiting policy mechanisms and implementations.

  • Tobacco products face the highest jump in 2020 over 2019 and 2018. According to a query response raised in the Lok Sabha, Indian authorities seized illegally imported cigarettes worth Rs 1,772 crore between April 2020 and February 2021. That compares with seizures worth Rs 187.6 crore in the previous financial year.

  • Counterfeiting activities are not limited to high-end luxury items. Common day-to-day items including cumin seeds, mustard cooking oil, ghee, hair oil, soaps, baby care and medicine are increasingly reported counterfeited by criminals.

Nakul Pasricha, president, ASPA, said, "Businesses are being attacked more often and on a larger scale by counterfeiters and frauds, especially due to the high demands that have been created due to the Covid crisis. A big challenge is that counterfeiters are becoming smarter, better funded, and organized. In this scenario, the onus on all impacted parties to stay ahead is even more critical. The Covid-19 pandemic has overwhelmed India's healthcare systems and delays in dealing with the issue might prolong our battle against Covid-19. Substandard, spurious, falsely labeled, falsified, and counterfeit products and illicit trade would further slow down the Indian economy's recovery and efforts towards breaking the chain of infection. Counterfeiters are taking advantage of the biggest humanitarian crisis that the world has ever seen. The trends we observe are alarming and call for immediate action.".

Pasricha added, "There is a need for an ongoing focus on building and nurturing authentication eco-systems in the country and as an industry association, we are committed to that. Our country requires active participation and involvement of all stakeholders such as the Government, policymakers, enforcement agencies, businesses and most of all, consumers. A lot of awareness is required at the industry, Government, and consumer level. The authentication environment will support the Government's "Make in India" initiative and its image globally, where trust is becoming an especially critical factor. ASPA is building innovative tools to help policymakers on the need for action and legislation in fighting counterfeiting and this report is one of such tools. In the week, the association will organize a webinar on "Protecting lives and securing the pharma supply chain during Covid-19". Apart from these, it is also going to launch a new informative portal to help brand owners and policymakers in framing their anti-counterfeiting strategies and solutions according to their perspective industry and product requirement."

With the release of the 2021 report, ASPA urges stakeholders to come forward to strengthen the environment against counterfeit and illicit products.

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