Counterfeiting in Indian electronics industry and the way forward

fake electronic products

It’s no surprise that you can easily purchase fake electronic products in India from prominent markets like Nehru Place and Ghaffar Market in New Delhi, Manish Market and Linking Road in Mumbai, Hong Kong Bazaar in Hyderabad, and Kasimedu Street in Chennai. In fact, there are many similar hotspots in different cities for buying counterfeit electronics goods. In addition, there are numerous tiny little shops, which sell fake versions of earphones, USB cables, chargers etc.

According to reports the electronic counterfeit products and their market is growing twice as fast as general goods. This alarming trend was published in the year 2014 in different newspapers and news websites and must have changed during years, but it still shows the seriousness of the situation.

The menace of counterfeit electronics has also forayed into the e-commerce space. A recent article by Quartz India cited a report according to which everyone in three Indians have received fake products in the e-commerce space, of which the largest share (45%) is of mobiles and computers and (16 %) is of TV, appliances and other electronic products.

A joint report by ASSOCHAM and E&Y has revealed that the Indian electronics and hardware industry is predicted to grow at a compound annual growth rate (CAGR) of 13-16 per cent to reach $112-130 billion in the current year. The growth between the years 2013-18 is due to rising demand, growing disposable incomes, wider broadband connectivity and e-governance programmes.

Fake electronic products or components can have a negative impact on the health of the consumer, brand image of the manufacturer and economy of the country. A duplicate USB stick can lead to loss of important data whereas, a fake IC in a medical device can be potentially fatal for the patient. Moreover, fake electronics can also pose a risk to national security and defence establishments. For example, military technology requires high-grade electronic products to function at their best. In case of a fake microchip, the results can be disastrous, the same applies in the case of nuclear reactors which cannot afford a fake electronic device or a component in any case.

There are two different types of counterfeit electronics products available in the Indian market.

  • The first type includes the completely fake product (not manufactured by the original component manufacturer but have laser markings)
  • The second type is known as partial fake products (manufactured by the original component manufacturer but are remarked to show different functions). In this type, the counterfeiters use fake packaging instead of remarking the product.

To tackle the onslaught of counterfeit products in the electronic sector the Department of Electronic and Information Technology had notified ‘Electronic and IT goods (Requirements for Compulsory Registration) order in the year 2012 under compulsory registration scheme of Bureau of Indian Standards.

The order maintains that no person shall manufacture or store for sale, import, sell or distribute goods which do not conform to the Indian Standard specified in the order. Although the order has proved to be a big milestone in curbing counterfeiting, still there are measures which need to be followed strictly to completely eradicate fake electronic products from the market.

Here are they:

  1. Creating stern policies for procuring and selection of suppliers which will bring down the number of counterfeit products in the supply chain.
  2. Proper disposal of electronic waste so that it cannot be used in manufacturing fake products.
  3. Propagating consumer awareness about fake electronic items.

Besides the above-mentioned points, a single window mechanism should be made by government in order to check the quality and compliance of an electronic item before it enters the market. With no counterfeit products in the electronic industry it can dynamically prosper to new heights with no losses.