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Bengal puts onus of counterfeit trade on affected companies

IANS | Kolkata |

Raising concern over counterfeiting practices, a senior West Bengal minister on Thursday alleged that companies, however, are neither bothered about it nor taking appropriate steps to check it.

"Counterfeit trade happening in the country is dangerous and it has become a menace," state Consumer Affairs Minister Sadhan Pande said here.

Citing an example of counterfeiting done for a particular brand of tea, he said: "It is a concern that such companies are not taking appropriate steps to stop counterfeiting. They do not bother to contact us and do not take it up seriously."

Seeking cooperation from the companies, he said the counterfeited products had reached reputed stores and shops across districts and that companies needed to be alert on how their products were being counterfeited.

"A mechanism has to be found to stop trade of counterfeit products," he said at an event organised by Ficci Cascade (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy).

Spelling out the hurdles for companies, officials from different companies said that taking action against the manufacturers of counterfeited products had been a difficult proposition.

"To curb the menace and for protecting the brand, domestically we are taking actions against the retailers and distributors. But we are unable to take on the manufacturers of counterfeited products, because majority of them are not within India," said Gaurav Vutts, Regional Legal Manager, Hindustan Unilever Ltd.

Executive Vice President (Marketing) of ITC Ltd Siddharth Wanchoo said the customs department had doubled the number of seizures in the last one year across country.

"The challenge we are facing is that cigarettes manufactured outside the country are being smuggled into India. These stocks are largely coming from Dubai, Myanmar and South-East Asian countries," Wanchoo said.

The second problem, according to Wanchoo, relates to illegal manufacturers within the country, taking advantage of the arbitrage facility available today.

According to a report prepared by the industry lobby, total loss to the government on account of illicit markets in just seven manufacturing sectors was Rs.39,239 crore in 2014.

Among various sectors, the maximum revenue loss to the exchequer from counterfeiting and illicit trade was attributed to tobacco products, estimating a revenue loss of Rs.9,139 crore, followed by mobile phones at Rs.6,705 crore and alcoholic beverages at Rs.6,309 crore.

Ficci's recent report — Invisible Enemy: A Threat to Our National Interests — highlighted that the smugglers are now switching over to cigarettes and fabric/silk yarn as they are low-risk, high-reward goods.

As per the report, the Department of Revenue Intelligence seizures of smuggled cigarettes increased by 78 per cent in the last one year, followed by fabric/silk yarn where the increase was 73 per cent.