Indian Fake Goods Compete With Chinese Imports

Written by Malcolm Subhan | Updated: May 29 2004, 05:30am hrs
Can you name the goods which currently account for some 6 per cent of world trade and are worth an estimated $500 billion a year Or which account for 15 per cent to 20 per cent of the Indian market for medicines, where they are worth an estimated $1 billion

The answer to the first question is counterfeit goods, to the second fake medicines. And if you didnt know it already, fake car parts, for example, account for up to 37 per cent of the Indian market, and counterfeit lubricants for roughly 20 per cent of the market for branded lubricants. A wealth of information on counterfeiting and piracy was made available to the 300 delegates to the first global congress on combating counterfeiting, held here earlier this week. It was co-sponsored by the World Customs Organisation (WCO), which is headquartered here, and Interpol, which describes itself as the worlds largest international police organisation, with 181 member countries.

The Indian delegates to the congress included Amarjit Singh, secretary-general to the Anti-counterfeiting Group of India in New Delhi. He noted that most of the counterfeit and pirated goods on sale in India are sold on the domestic market; very few in fact are exported. This was one of the findings of a study covering 65 countries which was carried out by the European Commission, the executive arm of the 25-nation European Union (EU), last year. The study noted that the main areas of counterfeiting and piracy in India involve violations of copyright and trademarks, unfair competition from look-alikes, and data protection.

The illegally copied goods are turned out by smaller Indi-an firms, but compete sometimes against imports from China. The EU itself is not an important export market for counterfeit products from Ind-ia, according to the EU study.

The situation is roughly similar in Pakistan, as regards locally produced counterfeit goods. However, an important part of the counterfeit goods on sale in Pakistan comes from China, which exports either the completed product or its main components, which are then assembled in Pakistan. China is the major player when it comes to trade in counterfeit and pirated goods, according to the EU study. It is estimated that some 15% to 20% of all branded products sold in China - they range from CDs and DVDs to industrial machinery and even entire petrol stations - are fakes. More and more of these goods are now being shipped to export markets in Asia and the western world.

Some two-thirds of the cou-nterfeit goods seized in Europe in 2000 came from Asia, in particular from China and Thailand. It has been estimated that some 100,000 jobs are lost in Europe each year because of the trade in counterfeit goods.

Now you would imagine that governments everywhere would be pressing for international action to halt the flow of counterfeit goods. The potential danger to the public from counterfeit products being exp-loited by organised crime and some terrorists is too serious for governments and law enforcement (agencies) to ignore, according to Interpols secretary general Ronald Noble.

He pointed out that while there are not many examples connecting terrorism to global counterfeiting as yet, law enforcement agencies and governments are not focusing on this. For Mr Noble there is no pressure on us to take steps to fight counterfeiting. And WCO secretary general Michel Danet noted, No one asked us to organise this congress. Its conclusions will nevertheless be passed on to the 162 customs administrations represented on the WCO.

A number of countries, including the US and China, and the EU, as well as the WCO and Interpol have recently esta-blished new programme to enf-orce Intellectual Property Rights. The previous Indian government even proposed a new law under which those counterfeiting pharmaceutical products could be sentenced to death.

Counterfeiting clearly is big business. But we dont have reliable statistics, Rita Hayes, deputy director general of the World Intellectual Property Organisation pointed out. She noted that government statistics, press reports and anecdotal evidence suggest that the scale of product counterfeiting increased world-wide in 2003.

Companies which face counterfeiting are not always willing to go public, fearing the consequent loss of consumer confidence in their products. And the strict secrecy enforced by the congress organisers may have been due in part to the presence among the delegates of top CEOs, such as Anthony Simon, president, marketing, Unilever Best Foods, and Paul Adams, chief executive of British American Tobacco.

The fact is journalists were invited to a press conference, given some fact sheets, and then shown the door. They were even denied a list of the participants for security reasons.

The first global congress to combat counterfeiting called on governments and customs authorities to enforce existing laws more effectively, introduce stiffer penalties to deter counterfeiting, and increase public awareness. And the costs are not only monetary. The WHO estimates that counterfeit drugs account for 10 per cent of all pharmaceuticals sold worldwide, rising to 60 per cent in some developing nations.