Fake products sales touch Rs 15,000 cr in March 2006

New Delhi, June 5 (UNI) The sale of counterfeit products across sectors like automotive components, pharma, herbal medicine and cosmetic captured a market size of Rs 15,000 crore through illegal channels in March, an ASSOCHAM report said today.

On account of increasing sale of fake products in the absence of regulatory mechanism, the revenue losses to the exchequer would have exceeded Rs 1200 crore for fiscal 2005-06, according to the estimates of the Associated Chambers of Commerce and Industry (ASSOCHAM).

The other areas in which spurious products sale is going on unabated comprise vegetable oils, spices, ghee and even watch components. In these areas of large economic activities, the fake products sale has been estimated within the range of Rs 4000 crore by March 2006.

The sale of contraband automotive components, pharma, herbal medicine and cosmetic products, based on ASSOCHAM estimates for fiscal 2005-06, is Rs 11,000 crore.

By March, 2005, through the sale of contraband products in these areas, the government incurred revenue losses in forms of duties evasion which has officially been put to Rs 1000 crore.

In a white paper on Fake Products Sale, prepared by ASSOCHAM, based on the feed back of its constituents, it has been stated that automotive component sector has witnessed the highest sale of fake products with an estimated amount of Rs 5000 crore in the current fiscal.

The automotive components that were in circulation in 2005 in different grey markets put the industry to losses which exceeded Rs 3000 crore which were within the range of Rs 2000 crore in the year 2004.

In the pharma sector, fake medicines were sold in rural and semi urban market the cost of which works out to be Rs 2000 crore, says ASSOCHAM chief Mr Anil K Agarwal while commenting on the ASSOCHAM paper.

The chamber estimates also point out that Rs 4000 crore worth of fake poducts were sold in areas of vegetable oils, ghee, spices and watch components by March 31, 2006, of which the large chunk came from the sale of watch components which has been estimated at Rs 2500 crore. The genuine manufacturers of watches had to lose out heavily because of huge price differential.

Herbal Medicine and cosmetics sector alone registered a sale of Rs 4,000 crore in 2005-06, which did a great deal of damage to its consumers, says the ASSOCHAM paper on fake products sale.

ASSOCHAM has suggested that measures should be taken to establish separate economic offence courts in every district. The Chamber has also written to the department of consumer affairs, cautioning it to evolve mechanism in consultation with other relevant ministries that can curve the rising menace of fake products industries to completely put a full stop to such activity.

UNI ARB PV KN1724