While India is battling out the second wave of the pandemic, a parallel war the country is fighting against the counterfeit products sold in the online and offline space.
In India, the expansion of e-commerce has led to greater availability of products, services beyond the metro cities and helped in the growth of Tier II and Tier III towns.
However, the overall growth of e-commerce— especially the growth of specifically related business models—has facilitated online trafficking in counterfeit and pirated goods.
Be it the largest e-retailers in India, e-pharmacies, e-marketplaces all bear the brunt of the counterfeits during the pandemic. Major brands like Amazon, Flipkart, Netmed, 1mg are facing issues due to counterfeits. It has its worst consequences, especially for medicine.
The government is maintaining stringent control on the supply of drugs like Remdesivir. However, still, it is sold in black markets for 10 times the market price, and consumers are ending up buying fake Remdesivir, impacting the lives of thousands. The battle with counterfeits is something the brands cannot fight themselves; they need central, state government, and law enforcement agencies.
While brands like Amazon, Flipkart have set up strong practices to stop counterfeits, confiscating counterfeits is a significant task for their heavy dependency on law enforcement agencies, especially state police. Many brands can trace counterfeits based on an audit by their teams and customer feedback. However, the challenge comes in confiscating and storing such material, which unnecessarily occupies tons of space in companies’ warehouse.
Since perpetrators working production, supply, and distribution of counterfeits work across states. Hence state police agencies also need to coordinate to ensure the supply chain network is busted.
The United States Department of Homeland Security’s (DHS) Office of Strategy, Policy, and Plans has taken significant initiatives on combating trafficking in counterfeit and pirated goods, including coming up with best practices for e-commerce platforms and third-party marketplaces. These best practices include comprehensive “Terms of Service” agreements, enhanced vetting of third-party sellers, rapid notice and takedown procedure. Other measures include limitations on high-risk products, enhanced post-discovery actions, indemnity requirements for foreign sellers, pre-sale identification of third-party sellers, identifiable country of origin disclosures. DHS also ensure marketplace seller establish unique I.D. and explicit transactions via Banks that comply with U.S. enforcement Requests for Information (RFI).
Given the nature of counterfeits coming in the market from medicines, supplements, electronics, India requires a consortium of the Indian industry to come forward to fight counterfeits. This consortium would like international cooperation. Many other countries battling similar issues have come up with solutions, policies, and governance models that can develop a specific answer to tackle the Indian problem of counterfeits while leveraging global best practices.
The organization for Economic Co-operation and Development (OECD) is one such intergovernmental economic organization with 37 member countries that has been making efforts globally to fight counterfeits and Pirated Goods.
In 2018 OECD published a governance framework to counter illicit trade.
The framework defined key institutional capacities nations, especially BRICS, to develop to counter illicit trade, which included enhancing the effectiveness of penalties and sanctions for countering illicit trade, use of criminal and civil penalties, and sanctions by Governments through civil administration. The framework emphasized implementing policies to enhance the effectiveness of penalties and sanction.
For India to start countering pirate goods, it needs to strengthen cooperation with the U.S., U.K., and E.U. through bodies like OECD and expand the scope of international frameworks.
The Ministry of Consumer Affairs in India is responsible for driving programs to stop counterfeits and pirate products in India. It has been closely working with states such as Maharashtra, Karnataka, Delhi, Andhra Pradesh to enhance the capacity of these states in fighting counterfeits. The Indian Department for Promotion of Industry and Internal Trade (DPI) under the Ministry of Commerce and Industry is also working in this direction and has set up a particular cell called Cell for IPR Promotion and Management (CIPAM). This cell has come up with National Intellectual Property Rights Policy which brings in a single platform for all Intellectual Property Rights (IPR). The national policy considers all inter-linkages within the Indian IPR ecosystem to create and exploit synergies between all forms of IPR, concerned statute. CIPAM has been leading efforts with state government protection IPR, training and awareness program for State Police. However, it needs to do more by bringing in policies and best practices of the DHS and playing a more decisive cooperation role with bodies like the OECD.
Hence a larger consortium involving industry, CIPAM, State Government is formed menace of counterfeits could be better managed in India. It’s also important to enhance laws to bring in stronger penalties and harsher punishments for perpetrators involved in counterfeit practices. India also needs to maintain stronger border controls to restrict the movement of counterfeit products from countries like China which has the biggest production market for counterfeit products. Hence Department of Excise and Customs needs to enhance its controls, monitoring, and tracking mechanism to track, trace and confiscate counterfeits and pirate goods originating at Indian borders. Greater cooperation between coastguard, navy and Department of Excise and custom could help restrict movement and entry of counterfeit products in India.
Given the large coastline of India and multiple ports of origin for foreign products in India, tracking and tracing mechanisms to identify fake products is a must, hence the coastguard, the navy must be given specific training, devices to track down any illicit movement of counterfeits across Indian ports.
Kanishk Gaur is Founder of India Future Foundation
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