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Fake auto parts industry growing at alarming rate

INDIA – The immense growth of the Indian automobile industry has also led to an increase in the notorious counterfeiting business, reports the Authentication Solution Provider’s Association (ASPA). Every year, the country bears a taxation loss of approximately Rs 2700 crore as spurious parts make Rs 11,000 crore of the Rs 40,000 crore Indian auto component market. Despite government checks, this parallel illegal industry is growing at an alarmingly pace. An excerpt of the interview with U.K Gupta president of ASPA published on Business Today.

What is the current status of counterfeiting in Indian automotive industry?
According to a recent study by FICCI the gray market has a substantial presence in auto and has also shown a big increase from 29.6 per cent in 2010 to 33.7 per cent in 2012. The total loss to the government estimated for 2014 on account of illicit markets in the auto components industry is Rs 3,113 crore, up from Rs. 2,726 crore in 2012. This loss is only on account of tax revenues.

What are the measures and technologies currently employed to prevent counterfeiting in India? How effective are they?
Some of the most effective technology that is used to combat counterfeiting is by application of Optical Variable Devices (OVDs)/Security Holograms and Security Labels such as 3D effect, 4 channel effect, slip effect etc., and printing features, such as, color changing inks and water marks. These features can be detected only with an aid of authentication tools. More secure solutions include optical features such as concealed texts, nano texts, raster texts etc., and printing features such as UV ink, thermochromic ink etc. Forensic features are barcode, mirror or taggant effects. The taggant effect consists of a special coat of nano particles.

How do you see the future growth of domestic automotive industry without the prevalence of counterfeiting?
It will be quite a challenge to have a world without any counterfeiting. ASPA and its members will certainly contribute in the fight to reduce the crime rate by being innovative and continuously developing solutions with new technologies and strategies to deploy them to desist, catch and prosecute a criminal. We are working on developing IS0 global standard for authentication tools to be used in anti-counterfeiting of material goods.