Manufacturing/ Selling of Counterfeit

Products

INTRODUCTION:
Counterfeit products are products, often of subservient quality,
manufactured or sold under another brand name or copy of the original
brand with minute changes without the brand owner’s consent. [1] Some
very obvious type of counterfeit products are replica of currencies,
branded clothes, shoes watches, handbags, electronic products,
software’s etc.

REASONS FOR COUNTERFEIT PRODUCTS:

 To take advantage of the brand value and name of the original

product.
 To increase the market share and place because of real product’s
popularity.
 To increase market share by lowering down the price of replica of
same product.

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TYPES OF COUNTERFEIT PRODUCTS:

1. Deceptive Counterfeit: When the consumers are unaware about

the products they are buying are counterfeit.

Deceptive Counterfeit Products:

Who are the buyers?
1. Illiterate/ Uneducated people
2. Consumers unaware of brand

2. Non-Deceptive Counterfeit: When consumer are aware of the

counterfeit products they are purchasing but still are willing to buy
those products

Non -Deceptive Counterfeit Products:

Who are the buyers?
1. People aware of brand but cannot afford to buy.
2. People looking for status to show-off.

LEGAL POINT OF VIEW:

 It is illegal to use trademark of some other company without
permission as per the Trademark Act 1999, violation of which may
cause heavy fines and imprisonment in some cases.[1]
 Brand Protection act violates the copying of the product/ design.
 Anti-counterfeiting Consumer Protection Act imposes criminal
liability for trafficking of such products. [2]
 It is an illegal activity, where the individual’s crime may not be
obvious around them.
 Copyright Act,1957 empowers the police to seize the counterfeit
products.[3]

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ABOUT COUNTERFEIT PRODUCT MARKET IN INDIA:

 In India, about 80% of the market is flooded with the counterfeit

products.
 This is causing about 87% indirect tax loss to the government.
 In FMCG sector, it is very surprising to know that every 5 th
product is faked or smuggled.
 According to the report from “The Economic Times” in March
2018, Counterfeit market’s worth is over Rs. 40,000 Cr.[4]
 The dependency of Indians on e-commerce sites in gradually
increasing where there is flooding of 95% of duplicate products
with heavy discounts which attracts people.
 The situation is even more alarming when it come
pharmaceutical products. Some products are not only fake but
also sub-standard.

COUNTERFEIT PRODUCTS FRON MANUFACTURER’S

POINT OF VIEW:
 Loss of Market Share
 Loss of revenue
 Depreciating brand value
 Increase in perfect competition
 Decreasing credibility

COUNTERFEIT PRODUCTS FROM FAKER’S POINT OF

VIEW:
 Selling fake brands at lower cost which increase their market
share.
 Increase in revenue without showing the income.
 Black money increases.
 Tax evasion.
 Easy Money.

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 COUNTERFEIT PRODUCTS FROM CONSUMER’S POINT
OF VIEW:
In Favour:

 Brand tagged products in significant cheaper rates.

 Nearly same quality as of real brands in some cases.
 Easy availability.

Against:
 Poor quality.
 Harmful contains/ materials used.
 Less durability.
 Zero Warranty.

MY OPINION:

In my opinion, Counterfeiting of products is not ethical and should

be banned strictly for following reasons:
 It is illegal in terms of laws.
 It promotes child labour.
 It may support organized crime.
 It diminishes tax revenues.
 It increases inflow of black money.
 Weakens environmental, health and safety regulations.
 May introduce dangerous products in market.
 It can be a reason for major health issues.

According to survey conducted on e-commerce by “Quartz India”

in April 2018, from about 3000 respondents from across Mumbai,
Delhi, Hyderabad, Chennai, Kolkata and Ahmedabad;

 Electronic products were most popular non-deceptive counterfeit

products’ purchased followed by fashion products.

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 It was seen that 9 out of 10 products were reported as counterfeit
and returned by the consumer.
 It was also noted that consumers were willing to buy the
counterfeit products when the prices were lesser than the original
products.[5]

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 EXAMPLES:

1. Cosmetics: There are various counterfeit products are available for

the branded products like Lakme/ Olay etc. Counterfeit products with
same name and packing are sold with degraded quality at a very
cheaper rate which has caused skin problems to thousands.

2. Pharmaceutical: Duplicated medicines have been a reason for death

of many.

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3. Electronics: Heating up of devices/ noise etc.

Conclusion: In my opinion there is no need of the counterfeit

products in market and this can be avoided by creating awareness
amongst the people and also imposing heavy fines and for the ones
who are caught manufacturing such products. Government should

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impose strict rules and licenses for manufacturers after reviewing
their products.

There are many such initiatives by the government like “Make-in-

India”, where the products are manufactured by the authentic
manufacturers and of the best quality but lower in price compared to
the international brands for which counterfeit products are mostly
available. Also in case of pharmaceutical “Genric” medicines are
available which are of very low prices with same compositions.

Hence all consumers should be made aware of such products which

are of high quality, low price but not “counterfeit”!!!