Thursday, July 5, 2012

SME sector hardest hit with thriving counterfeiting menace

 Counterfeiting is one of the fastest growing economic evildoing and is emerging as a network of organised crime impacting the profits of companies, governments and individuals. The shortcomings of the growing threat were recently discussed at a day-long seminar on 'Developing a Pro-active Strategy to curb counterfeiting' on the World Anti-Counterfeiting Day on June 13 organised by leading industry lobby, Federation of Indian Chambers of Commerce and Industry (FICCI) forum Committee on Anti-Smuggling and Counterfeiting Activities Destroying Economy (CASCADE).


FICCI-formed panel called FICCI-CASCADE expands into a committee on anti-smuggling and counterfeiting activities destroying the economy. The committee is closely working with the government to curb this menace.
According to FICCI-CASCADE, the share of fake/counterfeit medicines was pegged at 15-20 per cent of the total Indian market, soft drinks at 10 per cent and fake cosmetics, toiletry and packaged foods share a ballpark figure of 10-30 per cent.


The term counterfeit not only signifies the forgeries of currency or documents, but it also describes the imitation of works at toys, art, clothing, software, electronics, pharmaceuticals, watches and many more. Counterfeit, an illegal imitation of goods, results in patent infringement or trademark infringement.
As per the reports made public earlier this year, the counterfeit goods in Asia are mostly produced in China and the nation is considered as the counterfeit capital of the world. Some Chinese companies are from head to toe into this business and are progressively faking many popular products owned by big Indian brands such as Dabur and ITC. The hazard is thinning out in an extent that is triggering losses worth as much as $5 billion annually.
However, the accelerative problem of Chinese counterfeiting is not only handicapping the growth of India but it is laming the economic development of China in the same amount.


Notably, in the recent past the Chinese government is attempting hard to eradicate the outspread thriving multi-billion dollar global industry of counterfeit from the country. The development comes close on the heels of Chinese government facing flak from scores of countries and also understanding the severity of the emerging danger.
In the same development, the neighbouring country has formed a 'leadership group' consisting the non-cabinet ministers to consider and deal with the counterfeiting problem, which is now estimated to account for 8 per cent of China's gross domestic product. In addition, the country has also pledged to expand its suppressed operations on counterfeit goods and establish a long-term mechanism to step up the fight.


The emerging players of Chinese industry have also felt the pinch of the flourishing counterfeits in their country. The counterfeiters are continuously forging their goods and marketing them across the world, which in turn leads to revenue loss and degradation of Chinese manufacturers in the global markets.


To fight and suppress the growing menace, the Chinese manufacturers sought for the needful and stringent law enactment against counterfeiting, so as to keep the threat at bay and help the Chinese industry to sustain the creditworthiness in overseas markets.


The boom of Chinese counterfeit products is ceaselessly hitting the Indian industry, primarily the small and medium enterprise (SME) sector and cottage industries. The peril is speedily killing the revenues of small traders, particularly from clothing, leather and jewellery sectors.
The sufferers demand both compensatory and punitive punishment for counterfeiting. The compensation will fill up the caused damages and punition will discourage the wrong-doers.


The enforcement of tough law against increasing penetration of counterfeiters and infringers is the demand of the hour. In the recently culminated seminar on the World Anti-Counterfeiting Day, Pankaj Agrawala, special secretary, department of consumer affairs, called for joint efforts to root out this nuisance and opined that the consumer consciousness is primarily the key to curb the growing menace of counterfeit goods.


There is a need to take progressive judicial declarations against counterfeiting and infringement. The cooperative, joint commitments from across the world will help to wipe out the problem.

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