India’s manufacturing ambitions have never been more ambitious. Through initiatives such as Make in India and Atmanirbhar Bharat, the country aims to increase manufacturing’s contribution to GDP from 17% to 25% by 2035, generate 143 million new jobs, and expand merchandise exports to USD 1.2 trillion.
Achieving these goals would transform India’s economic landscape, strengthen domestic industries, and create opportunities across urban and rural regions alike.However, a critical challenge threatens to undermine this vision—counterfeiting.While policymakers focus on boosting production capacity and export competitiveness, the growing proliferation of counterfeit goods continues to erode the foundations of India’s manufacturing ecosystem. If India seeks to become a global manufacturing powerhouse, ensuring product authenticity must become a national priority.
A Growing Threat to India’s Manufacturing Economy
According to the recently released State of Counterfeiting in India 2025 report by CRISIL and ASPA, consumers estimate that nearly 29% of products available in local markets are counterfeit. Even more concerning, 89% of urban consumers report having unknowingly purchased counterfeit products at least once, while 74% believe the problem has worsened over the past year.The scale of economic damage is substantial. The counterfeit packaged food market nearly doubled from ₹1,124.74 billion in 2017-18 to ₹2,238.75 billion in 2022-23. Consumers estimate that counterfeit products account for 34% of branded apparel, 28% of pharmaceuticals, and 22% of automotive replacement parts sold in the market.These sectors represent critical pillars of Indian manufacturing. Every counterfeit product sold displaces genuine production, reduces factory output, impacts employment generation, and weakens investments in innovation and quality.
The Hidden Economic Cost
Counterfeiting functions as an invisible tax on legitimate businesses. Genuine manufacturers invest heavily in research, quality control, regulatory compliance, taxation, and workforce development. Counterfeiters avoid these costs while selling products at lower prices, creating unfair competition.The impact extends directly to government revenues. Counterfeit products generate no GST collections, no income tax contributions, and often bypass regulatory oversight. Across sectors including FMCG, pharmaceuticals, apparel, automotive, and agrochemicals, the resulting tax leakage runs into billions of rupees annually.More importantly, persistent counterfeiting discourages formalization. Businesses struggling to compete with untaxed counterfeit products face margin pressure that can push portions of the supply chain into informal operations, undermining broader economic reforms.
The Human Cost of Counterfeit Goods
Beyond economic losses, counterfeiting poses serious risks to public safety and livelihoods.India’s 140 million farming households depend heavily on reliable agricultural inputs. Counterfeit seeds, pesticides, and fertilizers can destroy entire crop cycles, leading to financial distress and mounting debt. For many farmers operating on narrow margins, a failed harvest can erase a year’s income and create long-term economic hardship.The risks are equally severe in healthcare. Counterfeit medicines may contain incorrect ingredients, improper dosages, or no active ingredients at all. For patients managing chronic illnesses such as diabetes, tuberculosis, or cardiovascular disease, counterfeit pharmaceuticals represent a direct threat to health and safety.Consumers purchasing counterfeit food products face similar risks, particularly in smaller towns where product verification remains challenging.
Counterfeiting and National Security
Counterfeiting is no longer simply a trade issue—it has evolved into a national security concern.International agencies including Interpol, Europol, the World Customs Organization, and the United Nations Interregional Crime and Justice Research Institute (UNICRI) have documented links between counterfeit trade and transnational criminal networks. Revenue generated through counterfeit goods has, in documented cases, been connected to organized crime and terrorist financing.The OECD estimates that counterfeit goods account for approximately 3.3% of global trade, representing hundreds of billions of dollars in illicit activity.Given India’s large and complex supply chains, counterfeit electrical components, chemicals, and electronics pose significant risks. Product authentication should therefore be viewed as strategic infrastructure essential to economic resilience and national security.
Why Existing Measures Are No Longer Enough
Consumers are becoming more vigilant, with 62% actively checking product authenticity before purchase. However, most still rely on visual indicators such as packaging appearance, labels, and product quality.Counterfeiters have become increasingly sophisticated, replicating packaging, branding, and security labels with alarming accuracy. In sectors such as agrochemicals, even genuine containers are sometimes collected, refilled with substandard products, and reintroduced into the market.The report indicates that 93% of consumers believe stronger awareness campaigns and systemic interventions are necessary to combat counterfeiting effectively.
Building a Stronger Authentication Framework
India must transition from traditional visual verification methods to comprehensive Authentication and Traceability Solutions (ATS) aligned with international standards such as ISO 22383:2020 and ISO 28000.Modern technologies already provide effective solutions, including:
- Tamper-evident security labels
- Optical variable devices and holographic technologies
- QR code-based verification systems
- Serialization and track-and-trace solutions
- RFID and NFC technologies
- Blockchain-enabled supply chain transparency
The government’s initiative to mandate QR code authentication for leading pharmaceutical brands offers a successful blueprint that can be expanded across critical sectors, including agrochemicals, automotive components, consumer goods, and apparel.
Trust as a Competitive Advantage
As India deepens its integration into global supply chains, traceability and transparency are becoming non-negotiable requirements. International markets, particularly in Europe and North America, are introducing increasingly stringent supply chain verification regulations.Global buyers are no longer purchasing solely based on price. They demand verifiable proof of authenticity, sustainability, and compliance.A “Made in India” label must stand not only for quality but also for trust. Without robust authentication mechanisms, Indian manufacturers risk losing competitive advantage in global markets where transparency is becoming a prerequisite for long-term business relationships.
Conclusion
India’s vision of becoming a global manufacturing leader cannot be achieved through increased production alone. It requires safeguarding the integrity of products throughout the supply chain.Counterfeiting undermines economic growth, reduces government revenues, threatens public health, damages brands, harms farmers, and creates national security vulnerabilities. Addressing this challenge demands coordinated action from industry, policymakers, regulators, and consumers.As India works toward the goals of Make in India and Viksit Bharat 2047, authentication and traceability must be recognized as essential pillars of industrial growth. Manufacturing without authentication is manufacturing without trust—and trust is the foundation upon which sustainable economic success is built.