Ecommerce
It is looking at putting a system in place called 'cash-back' to compensate consumers who receive a counterfeit product when they shop online.

The government of India has woken up to address the issue of counterfeit products being sold online. There have been several complaints from customers who had received such fake goods after being lured by huge discounts on popular brands.

Some media channels had even done sting operations to expose how the traders were operating with impunity and they claim to be supplying the fake and counterfeit products through most ecommerce platforms. In reality, it is a global phenomenon and not limited to just the Indian markets.

The government’s Department of Industrial Policy and Promotion (DIPP) and the Ministry of Consumer Affairs (MCA), are said to have initiated talks with the ecommerce companies.

The proposal being considered is on the lines of compensating the customers whenever they raise a complaint and are able to establish within reasonable limits that the product a customer has received is a counterfeit. They are calling it ‘cash back’. These plans are still in initial stages.

An official from the government side told PTI that the ultimate aim is to restrict the sale of counterfeit products at the source and there are very strong reasons for this. However, there are consultations being held with all the stakeholders so that a viable mechanism can be put in place. It is also understood that the government wants this mechanism to be voluntary in nature.

The trouble with counterfeits is it is lose-lose for all concerned. The owner of the brand has the brand’s reputation and goodwill to worry about, while the government looks at it from the loss of revenue in the form of taxes. An original branded product selling at a higher price brings in more GST for the government than a counterfeit being sold at a fraction of that price.

Moreover, on many occasions, the people involved in counterfeiting have been found to be diverting the funds to other illegal activities.