Indian Authorities Conduct Widespread Raids for Counterfeit Bearings

Police in India, acting on a flurry of official complaints by SKF India, have again stepped up the country's long-running battle against counterfeit bearings. Recently, raids have occurred at bearing distributors in Mumbai, Nashik and Guntur. In each case, distributors were accused of marking and/or selling counterfeit SKF brand bearings. In Mumbai, the Pydhonie Police carried out a raid at N.N. Trading Corporation on Samuel Street, where they seized, "large quantities of counterfeit bearings with the SKF brand, aggregating approximately Rs. 17 Lakhs (USD $38,000)." In that case, the police also arrested the business owners, Mr. Naresh Shah and Mr. Niranjan Parekh, charging them with copyright violation and, "cheating customers through the sale of spurious products." The Nashik Police raided various shops in the MIDC area of Nashik. Again, "large quantities of counterfeit SKF bearings" were seized. Companies raided were Prakash Trading Corporation, Galaxy Sales Corporation, ABV Trading Link and Payampalli Traders. In each case, the owners were also arrested on the same grounds of copyright violation and cheating customers through the sale of spurious products. In Guntur, district police raided two shops, seizing counterfeit bearings and arresting the owners for the same charges as in Nashik and Mumbai. The shops raided were Loveren Agencies and Suresh Agency. Owners names were not yet released. Counterfeiting is a widespread and desperate situation in India, studies putting counterfeits as high as 40% of all products sold in the country, including 40% of all auto parts and pharmaceuticals sold. India's problem with counterfeit bearings goes back many years, with SKF at one point claiming at least 30% of the SKF branded bearings sold in India were counterfeits. Other raids have turned up not only bearings but also helped authorities trace the origin of the counterfeit bearings and how they got into the distribution system. While the basic bearings used to counterfeit sometimes come into the country unmarked, the vast majority are reportedly smuggled in over the border from China. Over the years, eBearing has heard from many foreign visitors to Chinese bearing factories who report commonly seeing warehouses there stocked with obviously counterfeit bearings marked with well-known brand names such as SKF, FAG, INA and Timken. Most, they say, are bound for India. Chinese authorities are often slow to act on complaints, are chronically shorthanded and willing to overlook trademark violations in a nation still struggling to understand the benefit and impact of upholding trademark and intellectual property protections. For distributors on both ends of the chain, the lure of low costs and high markups keeps them trying. As a result, bearing manufacturers have been forced to fight counterfeiting the long way round, starting from retail and distributor enforcement, working back down the supply chain and hoping to either catch the producers or eliminate their customers. Indian authorities have streamlined the raid, seizure and imprisonment process, now requiring only proof of sale and counterfeit relationship to launch a full-scale assault on a business. In the past, the process took so long the counterfeiters would be long gone by the time authorities arrived. In India, SKF changed its boxes and most bearings are now wrapped in counterfeit-fighting holographic wrappers. The wraps reportedly cost up to a rupee each, adding to the cost but providing a, "necessary level of protection and assurance," for bearing buyers. Customers, too, are experiencing the high cost of failed low-quality counterfeit bearings, in damage to equipment, vehicles and machinery. Often, the name brand bearing manufacturer is blamed for the failure unless the counterfeit is identified as such. The direct and indirect financial damage is real; a 2001 study by ORG Marg found that counterfeiting in India is so widespread that 85% of customers who stopped buying SKF bearings did so because of counterfeits. They became so pervasive retail customers lost confidence what they were receiving was actually an SKF bearing. And even with the holograms on packaging, SKF has had to back up the effort with an expensive ad campaign to create customer awareness. In many of these most recent raids, counterfeit SKF bearings were reportedly found stocked in and alongside real SKF product, further illustrating just how difficult rooting out counterfeits is and how easily customers can be fooled. SKF India Managing Director, Rakesh Makhija, said of the recent raids, "Spurious products are a deterrent to the economy at large. SKF India, as an organization is completely committed to safeguard its customers' interest. We are working closely with our Authorized Distributors and Authorized Stockists to ensure that customers receive only genuine bearings."