Counterfeiting Emerges as a Major Challenge to India’s Manufacturing Ambitions
India’s ambitious manufacturing growth agenda could face a significant obstacle if the growing challenge of counterfeiting is not addressed, according to Ankit Gupta, President of the Authentication Solution Providers’ Association (ASPA).
As the country pursues the goals of the Make in India initiative—including raising manufacturing’s contribution to GDP from 17% to 25% by 2035, creating 143 million jobs, and expanding merchandise exports to USD 1.2 trillion—ensuring product authenticity has become increasingly important for sustainable industrial growth.
Counterfeit Products Continue to Expand Across Key Sectors
Drawing on findings from the recently released State of Counterfeiting in India 2025 report by Crisil and ASPA, Gupta noted that consumers estimate nearly 29% of products available in local markets are counterfeit. The report also found that 89% of urban consumers have purchased a counterfeit product at least once, while 74% believe the prevalence of fake products has increased over the past year.
The issue affects several major industries. The report highlights that the illicit market for packaged foods nearly doubled between 2017-18 and 2022-23, increasing from INR 1,124.74 billion to INR 2,238.75 billion. Consumers also estimate that counterfeit products account for 34% of branded apparel, 28% of pharmaceutical products, and 22% of automotive replacement parts available in the market.
These sectors represent critical pillars of India’s manufacturing ecosystem, making counterfeiting a challenge that extends beyond brand protection to employment generation, industrial competitiveness, and economic growth.
Impact on Tax Revenue and Formal Economic Growth
Counterfeit products not only affect legitimate manufacturers but also reduce government tax collections. Sales of counterfeit goods often occur outside formal regulatory and taxation frameworks, resulting in losses of GST, income tax, and other revenues.
The report suggests that widespread counterfeiting can also discourage formalization within industries. Genuine manufacturers competing against lower-priced counterfeit products face increasing margin pressure, which can weaken investment capacity and long-term competitiveness.
Risks for Agriculture and Public Health
The report highlights broader social and economic implications, particularly in agriculture and healthcare.
Counterfeit agrochemicals and agricultural inputs can lead to crop failures, causing significant financial losses for farmers operating on limited margins. Failed harvests may create long-term debt burdens and contribute to agricultural distress.
Similarly, counterfeit medicines present serious health risks. Products containing incorrect ingredients, incorrect dosages, or no active ingredients can undermine treatment outcomes and pose direct threats to patient safety. Counterfeit food products also raise concerns about consumer health and product quality standards.
Brand Reputation and Consumer Trust at Stake
Counterfeiting can also damage the reputation of legitimate brands. Consumers who unknowingly purchase counterfeit goods often associate product failures with the original brand rather than the counterfeit manufacturer.
This erosion of trust can affect customer loyalty, retailer confidence, pricing power, and export opportunities. For Indian companies seeking to build a global presence, protecting brand integrity has become increasingly important in international markets.
Growing Focus on Supply Chain Security
The article also points to concerns raised by international agencies regarding the links between counterfeit trade and organized criminal networks. Global organizations such as Interpol, Europol, the World Customs Organization, and the United Nations Interregional Crime and Justice Research Institute (UNICRI) have documented how proceeds from counterfeit goods can support illicit activities.
As global supply chains become increasingly regulated, traceability and authentication are emerging as critical requirements for international trade and market access.
Need for Advanced Authentication and Traceability
According to the report, many consumers currently rely on packaging appearance and visual inspection to verify authenticity. However, counterfeiters are increasingly capable of replicating labels, packaging, and branding elements.
The article advocates broader adoption of advanced authentication and traceability technologies, including tamper-evident security features, holographic labels, serialization systems, QR-code verification, digital tracking technologies, and blockchain-enabled traceability.
Recent government initiatives, such as mandatory QR codes for leading pharmaceutical brands, are cited as examples of measures that could be expanded to other sectors, including agrochemicals and consumer goods.
Strengthening Manufacturing Competitiveness
As India seeks deeper integration into global supply chains, product authenticity and traceability are becoming increasingly important factors in maintaining competitiveness.
International markets, particularly in Europe and North America, are introducing stricter traceability requirements across multiple industries. Ensuring transparency throughout the supply chain could help Indian manufacturers strengthen consumer confidence, protect brand value, and support long-term export growth.
The report concludes that achieving India’s manufacturing and economic ambitions will require not only increased production but also stronger mechanisms to guarantee product authenticity, protect consumers, and maintain trust across domestic and international markets.
