By Ankit Gupta, President, ASPA
Make in India has an unambiguous target: raise manufacturing’s share of GDP from 17% to 25% by 2035, generate 143 million new jobs, and build merchandise exports to USD 1.2 trillion. It is a vision that, if realised, would transform not just India’s economy but the lives of workers on factory floors, MSME owners in tier-3 towns, and daily wage labourers waiting to enter the formal economy. But there is a foundational question this ambition has not yet answered: if we are going to make more in India, how do we guarantee that what we make is genuine and that what reaches consumers is what was produced?
The threat sitting silently inside India’s manufacturing story is counterfeiting, and it is far larger and growing much faster than most policy conversations acknowledge. According to the newly released State of Counterfeiting in India 2025 Crisil-ASPA report, consumers estimate that nearly 29% of products in their local markets are counterfeit. An alarming 89% of urban consumers report having purchased a counterfeit product at least once in their lifetime, and 74% believe the incidence has increased over the past 12 months alone.
The Economic Drain
The scale becomes clear when you look sector by sector. The illicit market for packaged foods nearly doubled from INR 1,124.74 billion in 2017-18 to INR 2,238.75 billion in 2022-23, a 99% rise. Consumer’s estimate 34% of branded apparel, 28% of pharmaceutical products, and 22% of automotive replacement parts on the market are counterfeit. These are not fringe categories. They are the backbone of Indian manufacturing. A small manufacturer loses business to a counterfeit that is perceived to be 22% cheaper. A labourer loses a formal job when that factory loses the market. Atmanirbhar Bharat was conceived as a promise to both. Counterfeiting breaks it.
The Indian exchequer has a direct stake here. Every counterfeit product sold is a transaction on which no GST was collected, no income tax paid, and no regulatory compliance met. Across FMCG, pharma, apparel, automotive, and agrochemicals, the cumulative tax leakage runs into figures that could fund public health programmes and agricultural support. Beyond the direct revenue loss, counterfeiting suppresses formalisation. Genuine manufacturers competing against untaxed fakes face margin pressure that pushes some into the grey economy themselves, eroding the very tax base the government is trying to expand.
The Human Cost
The numbers do not capture the full weight of this crisis. Counterfeiting has consequences that land not in spreadsheets but in human lives, in ruined harvests, damaged health, and livelihoods wiped out without recourse.
India has roughly 140 million farming households, a significant share operating on thin margins, borrowing every season to buy seeds, fertilisers, and pesticides. When a counterfeit agrochemical enters the supply chain, a farmer does not just lose money. He loses a season. A failed crop cycle can erase an entire year of income in weeks. The debt does not disappear with the crop. It compounds. The link between agrarian distress and farmer suicides in India is well-documented. Counterfeit agricultural inputs are a contributing factor that this policy conversation has treated as a footnote. It should not be.
Counterfeit pharmaceuticals, which consumers perceive to constitute 28% of the market, can contain the wrong active ingredient, the wrong dosage, or nothing at all. For a patient with diabetes, tuberculosis, or a cardiac condition, a fake medicine is not a consumer disappointment. It is a clinical risk. Contaminated food products in tier-3 towns, where brand verification is nearly impossible, carry the same threat. The health of a population and the integrity of its supply chains are not separate issues.
For brand owners, the damage goes beyond lost revenue. A consumer who has a bad experience with a counterfeit product does not blame the counterfeiter. He blames the brand. A brand that becomes associated, in consumer perception, with inconsistent quality or unreliable supply, loses pricing power, retailer support, and eventually market share, not because its product failed, but because its name was stolen. For Indian brands building equity in international markets, the reputational spill over from domestic counterfeiting can close export doors before they are ever opened.
The National Security Dimension
There is a dimension of counterfeiting that rarely surfaces in India’s domestic policy debate, though international agencies have documented it extensively. Investigations by Interpol, Europol, the World Customs Organisation, and the UNICRI confirm that counterfeit goods proceeds flow into transnational criminal networks and, in documented cases, to terrorist organisations. The OECD and the EU Intellectual Property Office have established that counterfeit trade constitutes approximately 3.3% of global international trade, generating illicit cash flows that are difficult to track because transactions are numerous, small, and dispersed.
India, with its large informal trade channels and under-policed supply chains, is not insulated from this reality. Counterfeit electrical components, electronics, and chemicals are precisely the product categories that intelligence agencies flag when tracing terrorist procurement networks. The question of product authentication is therefore not merely a trade competitiveness issue. It has a national security dimension that should compel the government to treat Authentication and Traceability mandates as strategic infrastructure, not optional compliance.
Addressing the Limitations of Current Systems
Currently, traditional defence mechanisms face certain limitations. Although 62% of consumers proactively check for product authenticity, a large portion relies primarily on visual cues, such as the product’s look and feel (61%) or packaging quality (55%). Counterfeiters are increasingly able to navigate these checks by closely mimicking original packaging and utilizing digital technology to replicate high-quality labels. In sectors like agrochemicals, for example, there are instances where empty genuine bottles are purchased from farmers and refilled with substandard materials. This indicates that relying solely on consumer vigilance may not be entirely sufficient to address the issue. In fact, 93% of consumers have expressed the need for more awareness campaigns and structural interventions to feel adequately protected
What Must Change
We must mandate a shift from visual checks to advanced Authentication and Traceability Solutions (ATS), adopting practices as prescribed in ISO 22383:2020 and ISO 28000. The technology exists. On the physical front: optical variable devices, tamper-evident security films, and holographic tear tapes. On the digital front: track-and-trace serialization, low-cost transponder tags, and block chain. The government’s move to mandate QR codes on the top 300 drug brands is a blueprint that must be extended across all critical sectors, including agrochemicals, where the consequences of counterfeiting are measured not in returns and refunds but in failed harvests and human despair.
As India integrates deeper into global value chains, we must also recognise that the EU and the US are implementing stringent traceability mandates. Globally, the OECD estimates counterfeit trade was worth USD 467 billion in 2021, concentrated in footwear, apparel, leather goods, and electronics. Global buyers do not purchase on price alone. They purchase on verifiable trust. A ‘Made in India’ label that carries no traceable chain of custody cannot command a premium in international trade and cannot win long-term supply contracts.
Viksit Bharat 2047 is a manufacturing vision at its core. Manufacturing without authentication is a vision without a guarantee.
