Exhaustion in India: when is it a national issue?


Ranjan Narula

Traders of parallel imports claim they are good for consumers; local brand owners say it’s counterproductive and bad for the economy. But what are the grounds for trademark infringement? Ranjan Narula reports

A parallel imported product is, by definition, a genuine branded product imported from another country without permission of the IP owner. With the world becoming flatter and more connected, traders are easily able to access the price of branded products in different countries. Also, the life cycle of products, in particular electronic products, is getting shorter.

As the price of older models drops, goods move from developed to emerging economies where consumers are price-sensitive and amenable to accepting older versions of the product/brand. This is particularly relevant in the context of electronic products such as mobile phones, laptops, tablets, etc. Further, in some cases, the products are cheaper due to differences in duty structure, leading to movement of goods from one country to another.

The Indian market has seen an influx of imported branded goods from Asian and Middle Eastern countries in last five years. A host of factors is responsible for the sudden jump in parallel imports in the electronic, confectionery, tobacco, cosmetics and alcoholic beverages sectors, including rising consumerism and the Indian middle class becoming more brand-savvy; the Indian economy growing by more than 8 percent per annum; and the reduction of customs duty.

parallel imports, trademark infringement