Online Marketplaces Are The Preferred Hub For Counterfeit & Smuggled Goods: FICCI


Counterfeit Products ECommerce

Most of us buy products from our favourite marketplaces believing that they’re genuine and are available at the best prices. However, that is not the case.


According to a report by FICCI CASCADE- Grant Thornton, online marketplaces have become the preferred hub for selling counterfeit and smuggled goods.

This is mainly because of the fact that India does not have any specific e-commerce legislation in our country for protecting the interest of the buyers. The report also went on to mention that such activities are not only a threat to our economy, but also pose as a threat to our national security.

It Affects Our Economy & National Security

Every industry and sector in our country is troubled by smuggling and counterfeiting. But the FMCG sector including the packaged foods, tobacco, personal goods, alcoholic beverages, and mobile phones, etc. is affected the worst leading to losses of billions of rupees of the industry and the government.

Inadequate enforcement of the existing laws, lack of any specific e-commerce laws, lack of consumer awareness about counterfeited products, and the high tax difference in the adjoining areas are the main reason for counterfeiting and smuggling.

Counterfeiting and smuggling not only leads to loss of the revenue to the original manufacturers and the industry in general, but also leads to loss of revenue in the form of duties and levies to the government while also taking a toll on consumer’s trust on the manufacturer’s brand. Consumer also pay higher price for the low-quality fake products.

The revenue generated from selling these counterfeited products might also be used to fund terrorist activities in the country.

“It is evident that illicit trade in India is not limited to a few cities or regions. However, there are specific areas which predominate in such activities and these are exploited as a transit point by illegal operators. In terms of the tactics, e-Commerce is the newest channel adopted by counterfeiters to effectively reach a wider audience. With online marketplaces witnessing a phenomenal growth in India, the space has also become an easy prey to fake goods,” said Vidya Rajarao, Partner at Grant Thornton India LLP.

Combating Counterfeiting

It is not very easy to encounter counterfeiting but increasing consumer awareness, adopting the latest anti-counterfeit technologies, reinforcing the legal system, and investing in R&D can help in combating fake products.

“In our country laws have been introduced that are not only compliant with our international obligations but are in many ways progressive. Moreover, given the emphasis on the current ‘Make in India’ campaign bringing in economic development and the much anticipated growth; an effort therefore needs to be made to examine how illegal trading activities can be curbed,” said A. Didar Singh, Secretary General, FICCI.

The report also suggests to setup a nodal governance agency which would help in coordinating national efforts and intelligence against illicit trade. Also the ‘Make in India’ campaign can also be of great help as it focuses on manufacturing high-quality products at an affordable price in the country. The report also stresses upon Intellectual Property Rights (IPR) as it is critical to innovation and saves manufacturer’s interests against counterfeiting.

It would take some time for the government to formulate e-commerce specific laws for protecting consumer interests and curbing counterfeiting. In the meantime, we would suggest you to buy only from sellers having high positive ratings on popular online marketplaces.

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