• PAGE ONE
• INDEX
• HOME

FICCI drive against grey markets

Our Bureau

NEW DELHI, June 4

THE Federation of Indian Chambers of Commerce and Industry (FICCI) is starting a consumer awareness campaign to highlight the menace of grey markets in the consumer and organised industry.

Existence of grey markets in some sectors of Indian industry is creating havoc to the normal economic activity in those sectors. It is a matter of concern not only for consumers and the enforcement agencies but also for the organised industry. To tackle the menace, the concerned Government agencies propose rules and regulations with stringent penal provisions, FICCI said.

Grey markets thrive because of low cost at which products were made available to unsuspecting consumers. Further, there was no uniformity in the selling price of the product from one consumer to the other. The price printed as MRP on the packages had lit tle relevance to the price at which the product is ultimately sold.

Low selling prices, which were the USP of the grey markets, are possible because of inferior quality and non-payment of Central and State duties. Often, grey units availed of the fiscal and promotional benefits given to small and medium enterprises.

Furthermore, quality was given low priority by manufacturers supplying to the grey markets. Sub-standard inputs and raw materials along with obsolete production process reduced the cost of production.

All these factors helped in low cost of production and allowed manufacturers a large margin. Indian manufacturing industry was attracting a bad name because, despite best efforts, spurious articles were flooding the market.

The department in the Ministry of Consumer Affairs, which regulate these matters, had asked FICCI to devise means to solve the problem and mitigate the instances of unfair trade practices. Cases in hand in which the problem of grey markets were prevalent were auto-spare parts and electrical goods.

It is in this context that FICCI is conducting a series of sensitisation workshops with sectoral focus. The first workshop will be conducted by FICCI in July and it would focus on auto spare parts.