Why counterfeiting diminishes the chances of foreign direct investment?

The world is a global village as there is a high interdependence of countries on each other in different fields. From world-wide-web to culture, technological innovation to trade, military alliances to transport there are many scenarios in which the world seems to function as a unified whole.

Among the above-mentioned aspects, trade and investment play an important role in the economic development of countries. Of late, Foreign Direct Investment (FDI) has become quite important for third world countries when it comes to their economic development. FDI impacts the economic growth of the host country (a country in which investment is done) through the transfer of new technologies, organization of human resources, increase in employment, linking of global markets, the rise of infrastructure and much more.

However, the rise of counterfeiting can damage the FDI prospects of a country and its potential to create valuable innovation centres. FDI is important for both advanced and emerging economies to increase their productivity and output. Lack of intellectual property rights and anti-counterfeiting measures diminish the chances of FDI. In India, the industries most impacted by lack of FDI due to counterfeiting include equipment manufacturing and pharmaceuticals.

The total reduction in FDI due to counterfeiting and piracy is quite harmful to aspects like employment, infrastructure and socio-economic development. Countries are sceptical of investing in prospecting countries with weak IP laws as it may lead to counterfeiting of their products, theft of their technologies, reduction in their profits and damage to the brand image.

With the implementation of stringent regulatory measures and anti-counterfeiting technologies, duplication can be prevented to a large extent which will further brighten the chances of foreign direct investment. For ensuring impeccable security against counterfeiting it is must that supply chains must also be secured. A comprehensive outlook towards anti-counterfeiting guarantees the economic development of a country.

If you require customized anti-duplication solutions for securing your products and supply chains, then call us on +91–785-785-7000 or mail us at connect@holostik.com