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Spike in counterfeit goods could damage ‘Make in India’ initiative, warns report

Counterfeit products are rising in India and fast-moving consumer goods, including food, is in the top three worst-hit sectors. Greater traceability is needed to safeguard the national ‘Make in India’ initiative, says an industry report.

Counterfeiting incidents in India have risen steadily over the past few years and jumped by 24% between 2018 and 2019, according to a recent report, The State of Counterfeiting in India, published by trade group, the Authentication Solution Providers’ Association (ASPA), which described the rate as “alarming”.

Fast-moving consumer goods (FMCG) products feature in the top three worst-hit sectors, along with alcohol and currency. Instances of fraud for FMCG products rose by 63% between 2018 and 2019, rising from 79 to 129 cases documented by New Delhi-headquartered ASPA.

Fake pharmaceuticals, documents, agricultural inputs, infrastructure materials, automobiles, tobacco, and clothing also feature in the top 10.

ASPA: Need to nurture authentication ecosystems

Nakul Pasricha, president of ASPA, said the upward trend called for immediate action.

“Counterfeit products across various sectors in India are causing over INR1 trillion [€11.5 billion] every year to our economy and the progress to date is simply not good enough to fight this crime […]. There is a need for an ongoing focus on building and nurturing authentication ecosystems in the country,” he said. “The involvement and active participation of all stakeholders is extremely crucial in this, as a lot of awareness is required at the industry, government, and consumer level.”

According to Pasricha, the rise in fake food and other products risked undermining the national ‘Make in India’ programme.

Launched in 2014 by Prime Minister Narendra Modi and led by the Department of Industrial Policy and Promotion, the initiative aims to transform India into a global manufacturing hub by promoting foreign direct investment, investing in the domestic manufacturing sector and strengthening intellectual property rights, among other actions.

‘Make in India’ aims to boost the manufacturing sector’s output to 25% of Gross Domestic Product (GDP) by 2025 from its current 16%.

Improving consumer trust through authentication and supply chain traceability was “critical” for the success of the programme, said Pasricha.

“We need to ensure that ‘Make in India’' products [remain] genuine, safe, and secure until they are delivered to the end consumer across the globe,” he said.

Counterfeit kitchen cupboard ingredients

Globally, some of the most commonly frauded foods include honey, to which criminals add cheaper sugar or high fructose corn syrup; olive oil, which is mixed with other seed oils, including potential allergens such as soy bean oil; or saffron, which can be dyed grass or beetroot fibres.

However, not all fake foods are high-value products. The ASPA report noted that fraudsters also targeted common day-to-day items such as mustard seed cooking oil, ghee (clarified butter), and cumin seeds. In December 2019, New Delhi police seized 30,000 kg of fake cumin made from flavoured stone powder and broom bits.

Allowing counterfeit food and drink to go unchecked can have serious consequences for public health, ASPA warned. In February last year, 143 people died in Uttar Pradesh and Uttarakhand after drinking toxic bootleg alcohol, sold as ‘country-made liquor’.

More regulation & greater traceability

The non-profit organisation called for more investment in authentication and traceability to reduce the exposure to food outbreak risks by making it faster, more efficient and more feasible to identify a source of food contamination, thus containing the impact.

“Fundamentally, India requires more development in current national food laws [and] needs to adopt an effective traceability system to improve and change the current food industry and food supply chain,” it said in an ASPA report, entitled Importance of Authentication & Traceability in the Indian Food Value Chain.

It praised the Tea Board of India for introducing Trustea, an in-house standard and verification system to overcome sectoral challenges such as poor working conditions and poor-quality tea.