Seamy Business

A fake trouser-length with Grasim woven on to the borders? Or Vimal? Even Raymond's, Siyaram and ocm? At the biggest counterfeit textile centre of India, the industrial town of Bhilwara in Rajasthan, you can name your brand and get it. More, you can even get away with it. As do the hundreds of manufacturers in the town, by producing suitlengths of dubious quality with famous brandnames woven on to the selvedges, the technical name for borders. This widespread counterfeiting goes on openly, causing great damage to the reputation of established textile companies and financial loss to the consumers, even as police and textile inspectors remain hapless spectators.

Counterfeit suitings are freely available in most major wholesale markets like Delhi, Saharanpur, Kanpur, Amritsar, Gorakhpur, Bhiwandi (near Mumbai) and Ahmedabadóthe last five are also major manufacturing centres. Says a dealer of Vimal brand textiles at Chandni Chowk, Delhi:  This trade is going on right under our nose but we cannot do much about it.  Rues S.K. Gupta, president, Grasim Gwalior:  The market is flooded by counterfeits of poor quality and make that affect overall brand images of manufacturers who have been building brands for years. This has reached such proportions that well-known manufacturers are feeling suffocated. And the consumer is the worst off in the process. 

Bhilwara has always been an important textile centre, though its transformation to an Ulhasnagar-clone has been more recent. Says Pradeep Aggarwal, who owns a manufacturing unit:  After the post-Ayodhya communal killings in Mumbai in '92, traders from all over the country drifted from Bhiwandi to Bhilwara for their supplies. This caused intense competition among manufacturers. As a short-cut to better business, some mills started using brandnames of reputed mills as value addition, a move which was a big hit with the wholesalers and retailers. So, their tribe just grew. 

The biggest production centre for suitings in the country, Bhilwara churns out 25 million metres per month, which constitutes more than half of the total demand for suitings. Sadly, the bulk of it is counterfeit material produced at over 250 ordinary powerloom units located in the riico estate, by about 3,000 manufacturers who get the suitings made on a jobwork basis by giving design and colour specifications. During the production process of the counterfeits, no unknown faces are allowed on the premises. And workers are given instructions on how to dispose of the fake products in case of a raid. The finished products are supplied to retail outlets through an organised distribution network.

What distresses the corporate world is that the trade is more prevalent in the low-priced range of suitings (the high-quality range can't be produced outside the mills), thereby affecting volume sales and resulting in fraud with poorer, ill-educated customers who have little brand awareness.These companies spend a sizeable amount on brand building, including heavy advertising expenses, r&d and quality control. While this increases their overheads, the gains accrue unjustly to the counterfeiters.

Naturally, then, the price factor holds the key to the growth of this trade. While the suitings from well-known mills come in the range of Rs 200-500 per metre, those from Bhilwara are sold dirt cheap at Rs 50-70 to retailers. This lucrative gap keeps the retailer chain addicted to the wholesaler-manufacturer network, thus forming a vicious cycle. Says manufacturer Vishnu Kumar:  Bhilwara's pricing is almost a quarter of the mills. Which is why the retailers demand suitings bearing selvedges of famous brands. These are sold to the buyer at a small discount, which is otherwise rare on branded products, luring him into the trap. 

Quality-wise, no counterfeit fabric can match the product of the reputed mills. The latter passes through quality control tests at every stage of production, while powerlooms have no quality control at all. In fact, at every level of production like weaving, dyeing and processing, quality is compromised to cut costs. Says an official of Reliance Industries, owners of the Vimal brand:  It needs a technical eye to differentiate between an original suiting and a fake material.  The major differences lie in the range, finish and durability. Explains Sanjay Gupta, chairperson, Textile Design & Development, nift:  Due to irregularities of production, the life of such products is very short. The fibre comes out quickly, the fabric shrinks and begins to look worn out after a couple of washes.  As a result, what a consumer like Mohan Singh gets is far below his money's worth.

The obvious question is, how does the trade continue to flourish? For, historically, raids have proved ineffective. In '96, Reliance conducted a raid with the help of the then SP, Pankaj Arya, which resulted in the confiscation of over 3 lakh metres of counterfeit textiles. But not a single person was convicted. The trade slowed down - temporarily. Meanwhile, ingenuity got the better of discretion. Some traders devised other ways of evading the long arm of the law by using De Vimal or Vimla on the selvedges during production. That way, when a raid is conducted at the premises, the makers have technically abided by the law. Later, when supplies are being made, De is removed from De Vimal and 'a' from Vimla by mending the borders. Similarly, iocm is used for ocm and P. Raymond's for Raymond's.

Some manufacturers have even registered their company's name as Vimal Syntex Pvt Ltd or Siyaram Synthetics Pvt Ltd. The idea is to mislead consumers by putting selvedges like  Killer, a product of Vimal Syntex Pvt Ltd . In rural areas, these easily pass off as the original. The manufacturers are above board as they've registered the names. It's another matter that the registration is done at distant places like Siliguri in West Bengal to avoid uncomfortable questions.

Brands like Siyaram Rural and Vimal Sulzcon have also applied for registration under the Trade and Merchandise Marks Act, 1958, at Ahmedabad. Says Bhanu Singh, a retailer from Bilaspur (MP) who was at Bhilwara to procure his quota of suitings:  We tell suspicious customers that the Siyaram Mill is owned by two brothers who have split. One of them has launched a new brand called 'Siyaram Rural'. 

But isn't using such names a copyright violation, for the law says a registered brandname cannot be used as either a prefix or a suffix? Says Sudarshan, Bhilwara district magistrate:  The motive behind registering such names is obvious. But we don't have a complete knowledge of registered brands. Either the mill or the registrar should send us a list of registered names. It's only then that can we do something.

Even the police plead helplessness. R.P. Singh, SP, Bhilwara, who conducted some recent raids, says:  It's a technical offence, like power theft. Unless we have technical experts, we're helpless. But we are always ready to conduct raids whenever companies approach us with specific information.  Singh adds that manufacturers brazenly ask police what they have to do with textiles.  He tells me that if the consumer or the company are cheated, they should go to court. 

Even raids have become riskier, with big money involved. Says N.M. Magadur, enforcement director at the textile commissioner's office in Mumbai:  We're aware of large-scale production of counterfeit textiles at Bhilwara. Our inspectors were there recently, but those involved in this spurious trade have formed a strong lobby. Our inspectors were threatened with dire consequences. Now they are willing to go there only with 24-hour police protection.  The same fear is echoed by Jeewan Bhaktawar, brand protection manager, Grasim Gwalior, who was at Bhilwara and Saharanpur recently to conduct raids.  The news of my presence spread like wildfire. People even came to know my hotel room number. It was a frightening experience. I met with some success only due to the cooperation from the SP.  In fact, some investigating teams have even been abducted by local goons and dumped across the border, and threatened with dire consequences if they return.

Genuine manufacturers in Bhilwara, who have their own textile brands, are openly disgusted. Says R.P. Soni of Sangam Textiles:  This trade is ruining the name of Bhilwara. In the long run, it can't benefit us.  For most others, however, it's a story of if you can't beat them, join them. Says manufacturer Shyam Garg:  When we see that some manufacturers are getting big orders with advance payments and higher profit margins by using selvedges of reputed brands, we are more than provoked to enter the trade.  The local textile federation had vowed to stop this menace, but is now finding it difficult even to check its growth. The federation lost much face recently when 11,000 metres of counterfeit suitings were found at the processing house of one of its key members.

Despite the even spread of counterfeiting in Bhilwara, many manufacturers are not really comfortable in the business. Says manufacturer K.S. Sharma:  We take all the risks and the fruits go to the retailer.  Adds another:  It's not as if we're minting money, our profits rise only marginally if we use big names. But without that, we don't sell at all.  The retailers having tasted blood, the fake textile trade carries on, while deprived and unaware of their rights, consumers continue to suffer.