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News article31 May 2022

The situation regarding counterfeits in India, as compared to China

The India IP SME Helpdesk has been in activity for close to 18 months now, during which members of our teams have had the opportunity to talk to a large number of EU and COSME SMEs, business support organisations, NGOs or entrepreneurs and answer their questions on the Indian IP landscape.

 

While the questions and issues we are presented with are as varied as the people we have had the opportunity to meet, there is one question that has come up repeatedly: when it comes to the protection of intellectual property rights and counterfeiting, how does India compare to China? As two economic giants which provide for the largest markets in Asia, it is no surprise that they would attract the attention of European SMEs, and while they will feel they have enough information on how IP rights are treated in China, such information is not necessarily as available or well-known when it comes to the Indian market. Let us therefore dive in and shed some light on the matter.

 

Volume of counterfeiting

 

China has the reputation of being the world’s factory, producing a large volume of all utilities and consumer goods bought on markets around the world, accounting for nearly 30% of global manufacturing output in 201 (the last year of relative normalcy until Covid hit the global economy)[1]. For comparison, the second largest manufacturing power in the world are the United States of America, at 17%. India sits as the fifth manufacturing power, at 3,1%. Unsurprisingly perhaps, the Chinese dominance in manufacturing is reflected in the volume of productions of counterfeits found across the globe.

 

A common study published jointly by the Organisation for Economic Co-operation and Development (OECD) and the EU IP Office (EUIPO) in 2019 estimated mainland China alone accounted for the export of roughly 55% of all IP-infringing products seized by customs at the borders of the EU. These numbers go up to nearly 80% when adding Hong Kong[2]. By comparison, India only accounts for about 1% according to the same study. Numbers speak for themselves: purely in terms of volume, India is in no way comparable to China as a source of counterfeits which enter illegally the European market. Indeed, other markets such as Hong-Kong, Singapore or Turkey are more of an issue, particularly given they are common passage points in which counterfeits transit before eventually reaching the European market. It can therefore be said that, in the present day, while India should not be seen as a particularly safe country in terms of counterfeiting, it need not be considered as a priority

 

Does this mean European SMEs should not worry in any way to the issues of IP counterfeiting and IP enforcement when going to India? Not exactly.

Counterfeiting and lack of enforcement of intellectual property rights remain a concern for European companies with presence on the Indian market. Especially in determined market in which India’s manufacturing power is important, as is the case of the pharmaceutical industry. India has earned the reputation of being one the world’s pharmacies, accounting for 50% of global demand for various vaccines, 40% of the generic demand in the US and 25% of all medicines sold in the UK to name just a few examples. When it comes to medicines found on the market in India, a report by the World Health Organization estimated that around 10% of drugs sold in India are substandard or falsified.

 

Therefore, while indeed India does not produce the same sheer quantity of counterfeit goods as can be found in China, specific sectors do have serious troubles with matters of IP ingringement in India.

 

A clear and obvious advantage of India as compared to China for EU SMEs when it comes to the protection of their intellectual property rights is the language aspect: while Chinese administrative proceedings are entirely conducted in Chinese Mandarin, it must be noted that English is, along with Hindi, one of the two administrative languages of India. This is to say, when having to deal with the Indian bureaucracy, any EU SMEs with English-speaking personnel can have direct access to the relevant information and be able to read it (note that this does not mean EU SMEs should not call on the services of specialist IP experts when dealing with this information, in India or abroad; it simply means that it will at least be understandable).

 

[1]https://www.statista.com/chart/20858/top-10-countries-by-share-of-globa…

[2]https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library…

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Publication date
31 May 2022