Every year, India loses about $7 billion in taxes due to counterfeiting, notes the bookmaker Parimatch.
Chanel, Dior, Prada, Mont Blanc, Marc Jacobs, Gucci, Versace, Parimatch, Christian, Polo, Benetton, Adidas, Tommy Hilfiger, Nike, Puma, and Louboutin are subject to counterfeiting in India annually for millions, if not billions of dollars. The fight of brands against counterfeiting in courts has been going on for years, but the punishment of counterfeiters is so imperceptible that it resembles the fight against windmills. Therefore, manufacturers of luxury clothing, accessories and shoes are forced to resort to ‘direct raids’, attacking counterfeiters.
Christian Louboutin Case
Aljazeera reports that a pair of black Dandy Pik Pik loafers, covered in sharp, jagged spikes and shiny studs, were part of the evidence before Judge Pratibha M. Singh in an intellectual property lawsuit filed by French luxury shoe brand Christian Louboutin against an Indian shoe manufacturer in Delhi High Court last year. The defendant, Shutiq – The Shoe Boutique, was illegally manufacturing and selling similar models in India. Its price was more attractive: if the original cost $1,800, the fake cost $80.
This court case will probably go down in history as a victory for the manufacturer over the counterfeiter, according to Parimatch. Impostors are operating under the name of this bookmaker in the Indian market, although the company itself is not present there.
So how did the loafer case end? The judge imposed a fine of $2,370 and told Shutiq that if it didn’t stop copying Louboutin’s designs, she would fine the store $29,628. For Louboutin, which earned $2.6 million in 2022 from shoe sales in India, that is a pittance. But the ruling in favour of protecting the brand is a significant victory in India, where intellectual property protection is unfortunately not a priority, Parimatch says. And winning in such cases is rare for big-name companies.
Regulations will help to overcome counterfeiting – Parimatch
India is the tenth richest country in the world, so global brands are eager to work in this market, as is Parimatch. It is not yet present in India. According to financial consultant KPMG, the Indian gaming market will grow to $3.9 billion in 2025, which attracts gambling companies here. However, the average income of 31% of the population in India does not exceed 1.3 million rupees or $15,400 per year. A rich life attracts, so this segment of the population is easily bought with counterfeits to feel richer. Counterfeiters are ready to come to their aid, offering various options for counterfeiting, which the Parimatch company is warning against.
For example, the shops of the Heera Panna shopping complex, which the United States has included in the list of the most “notorious markets” in the world for counterfeit products, offer two qualities of each luxury product: a “first copy”, or “AAA”, which is close to the original, and a cheaper version. They are aimed at richer and less wealthy consumers.
The gambling market works in the same way. For players with wealth and self-respect, the market offers licensed games that will cost them more. And in the cheaper segment, where illegals dominate, you can often come across fakes of famous brands that do not guarantee anything to their players. And this can and should be overcome at the level of state regulations, Parimatch believes.
How much does India lose to counterfeiting?
The FICCI CASCADE report, which Parimatch is also familiar with, determined that the annual tax loss due to counterfeiting of just five products – alcohol, tobacco, mobile phones, FMCG (fast-moving consumer goods), packaged food and personal goods – is about $7 billion. This is a very sensitive amount for the country’s budget, where many Indians need government support, Parimatch believes.
And all because of mentality and desire of the impoverished population to at least pretend that they live better and their willingness to buy a fake, in which they see nothing wrong. So, a Balmain bag, which costs $ 800 dollars, in India calmly turns into a fake for $ 70 dollars, which quickly finds its consumer.
More alarming are fake auto parts, which account for about 20% of road accidents in India. It is also known that every third antibiotic sold in India is fake. And this is already a harm to the life and health of Indians, whom the Indian authorities should take more careful care of, believes Parimatch. After all, gambling companies-scammers also pose threats to the life and health of Indians, when their illegal actions cause suicides and gambling addiction.
It should be mentioned that India has signed an agreement with the World Trade Organization (WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and has several laws that make it easy to stop production and sale of counterfeit goods, punishing counterfeiters with fines and prison terms. Parimatch noticed that unfortunately, companies do not note the real interest of the authorities, especially at the regional level, to combat counterfeiting.
Raids are effective
In India, international brands are opting to respond more proactively to the dire situation. Singh, CEO of Brand Protectors India, says that filing civil lawsuits under civil law is in vain. He prefers what he calls ‘direct raiding actions,’ Aljazeera reported, which reached out to Mr. Singh for comment.
He told the publication that during the ‘criminal raids’, the counterfeiters themselves are caught and the counterfeit is seized. “It is undoubtedly a significant loss for the counterfeiter, who loses hundreds of thousands of rupees. Counterfeiters are very intelligent people. If a brand has a zero-tolerance policy for duplicates and conducts raids aggressively, they will change the brands they are counterfeiting,” concludes Mr. Singh.
But there are drawbacks to such raids. They require months of planning and coordination with local police and courts in complete secrecy, otherwise it will not work. The raids can be brutal. For example, Singh, who has conducted more than 2,300 raids on counterfeiters, was offered bribes, stabbed several times and had his vertebrae, shins, shoulders and hip broken.
The original brings more money to the budget
Parimatch believes that India lacks strengthening of intellectual property protection measures. There are laws that stand guard over copyright, but they are mostly powerless. Increasing fines and longer prison terms for counterfeiting will improve the situation, the bookmaker Parimatch believes. However, this is not the only thing that is needed.
Parimatch is sure that the intransigence of officials and judges, the willingness to desperately fight counterfeits, and on the part of consumers – low tolerance for them and the willingness to refuse to purchase them – this is what will fundamentally change India in this matter. Intolerance towards plagiarism and counterfeits will fuel tax revenues to Indian states and improve the lives of ordinary people, of whom India has the largest number, notes Parimatch.
Comments are closed.