Genuinely crack down on fakes

Fake goods - apparel, FMCG and pharmaceuticals - constitute a thriving economy in India, with 1 in 3 consumers in cities coming across a counterfeit product in the past year. Coordinated national enforcement action against fakes is increasing while brands are turning to technology for authentication. But tech is a double-edged sword in the battle against counterfeits. QR codes raise the bar against pirated goods while ecommerce facilitates their distribution. Identifying counterfeits is a cat-and-mouse game that becomes progressively sophisticated, which leads to AI. It helps detect pirated goods by analysing product details, supply chains and market data. Analytics are being deployed to identify imperceptible product variations, scan for suspicious marketing, and flag price and volume variations.

Economics of fakes are driven by the price difference between legitimate and illegitimate products. This has an uneven impact across industries - it is easier to fake infant milk powder than a smartphone, although counterfeits exist in almost all industries. Value chains in the counterfeit industry must climb in tandem with the regular economy to remain profitable. Piracy typically declines as manufacturing advances and high economic growth holds some deterrent value, but not to the extent of effective policing. Since India is not yet an advanced manufacturing economy, the burden on law enforcement is considerable.

Corporate action against piracy extends to both production and distribution. The channels through which goods move are particularly vulnerable to carrying counterfeits. This tilts the advantage in favour of large enterprises with structured distribution networks while smaller enterprises need greater recourse to the law. The fight against piracy needs a coordinated response from industry and regulators to identify and counteract production and distribution of fake goods.