Aiaca_GIs of India_Socio Economic and Development Issues

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and 3. Promote goods bearing GI in the export market.The Government of India has established the 'GeographicalIndications Registry' with all-India jurisdiction at Chennai, wherethe GIs can be registered.

Till March 2010, 120 goods have been registered under the Actand many more are in the pipeline. Some of the well known GIgoods are 'Darjeeling' (tea), Pochhampalli Ikat, ChanderiHandloom, 'Basmati' (rice), 'Alphonso' (mango), etc.

Out of the total 120 registered GIs, 80 belong to the handicraftcategory followed by agriculture(31), manufactured(7) and foodstuff(2).There is a near complete absence of an effective post-GImechanism in India.The Government's role is vital in the post- GI mechanism.Without government support, most producer groups cannoteffectively defend or promote their GI brands as they do notpossess the necessary resources.The Indian Government has not made any headway in adoptionof strategies for branding and promotion of GI products as wellas their marketing and distribution in both domestic and exportmarkets.Currently, the action related to GI appears concentrated onregistration of GI goods and, in many states the StateGovernments are acting in haste. The identification andregistration is happening without adequate due diligence.

There is a dearth of research from the Indian perspective onpotential benefits from GI protection. While many studies havebeen done in Europe on the issue, hardly any systematicassessment has been undertaken by the relevant agencies in Indiawhile identifying the products to be accorded GI status.

Key Facts & Issues

PolicyBrief

#2

October2010

Geographical Indication (GI) is one of the six Trade-RelatedIntellectual Property Rights (TRIPS) of the World TradeOrganisation (WTO). It identifies a good as originating from aparticular place, where a given quality, reputation or other

characteristics of the good become essentially attributable to itsgeographical origin.GIs may be associated with natural, agricultural, manufactured orindustrial goods.

GI acts as a signalling device that helps producers differentiate their products from competing products in the market andenables them to build a reputation and goodwill around theirproducts, which often fetch a premium price.GIs are collective rights owned by the concerned communities.The key socio-economic issues relating to geographicalindications relevant to developing countries includemisappropriation, protecting traditional and indigenousknowledge, improving market access, creating niche market,protection of reputation, potential income effect and ruraldevelopment.A consumer survey done in Europe (WTO,1999) revealed that40 percent of consumers surveyed were willing to pay apremium of 10 percent for origin-guaranteed products.Unless a geographical indication is protected in the country of itsorigin, there is no obligation under the TRIPS agreement for theother countries to extend reciprocal protection.

In India 'The Geographical Indications of Goods (Registrationand Protection) Act (GI Act) was enacted in 2003 in compliancewith India's obligations under TRIPS at the WTOThe Act has three key objectives: 1. Adequately protect theinterest of producers of GI goods & add to the prosperity of theproducers of such goods, 2. Protect consumers from deception,

1

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11 10

52

19

1

19

33

7

1 1 11 1

0

5

10

15

20

25

30

35

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Agricultural

Handicrafts

Manufactured

Food Stuff

Source: Based on data from GI Office, Chennai; as on September 2010

Geographical Indications

of IndiaSocio- Economic and Development Issues

Year Wise Distribution ofRegistered GIs in India

Year Wise Distribution ofRegistered GIs in India


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Introduction

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1With Intellectual Property Rights (IPRs) increasingly influencing trade both at the national and international level; harnessingtrade benefits depends on the degree of protection enjoyed bythe owners of the IPRs. Geographical Indications (GI) is one ofthe six Trade-Related Intellectual Property Rights (TRIPS) of the

2 World Trade Organisation (WTO) that seeks to providecomprehensive and effective protection to goods registered as

3GI goods. Geographical Indication (GI) is defined as anyindication that identifies a good as originating from a particularplace, where a given quality, reputation or other characteristicsof the good are essentially attributable to its geographical origin.GIs may be associated with agricultural, manufactured or

industrial goods. Non-agricultural products, which typicallyqualify for GI protection include handicrafts, jewellery, textiles,

etc. (WTO, 2004). Given India's historically vibrant and famouscraft traditions, a number of craft genres and products from thecrafts sector qualify as GI goods. If harnessed properly, tradegains from enhanced sale of these GI goods could providetremendous socio-economic benefits to the producers of suchgoods. India, in compliance with the TRIPS Agreement of the WTO, enacted 'The Geographical Indications of Goods(Registration and Protection) Act, (GI Act) on 15th September2003 to provide protection to the goods registered under theAct. Seven years down the line, evidence from the groundsuggests that while there has been some progress in terms ofnumber of goods registered under the GI Act, there remain a

number of issues and concerns in the context of harnessing thepotential commercial benefits out of GI registration in India.

The Rationale underlying GI Protection

Huge information gaps (information asymmetry) exists in themarkets today that lead to typical market information problemsin the form of adverse selection and moral hazard (Akerlof,

1970). Information asymmetry impacts negatively on the market: the quality of total supply drops, higher-quality products aredriven out of the market and some consumers are no longer able to satisfy their preferences (OECD, 2000). Producersmaintaining the quality of their products are exposed to unfaircompetition from producers who sell lower quality products atthe same price.This unethical practice of selling fake products inthe name of reputed products to fetch better prices is rampant inthe Indian market and even abroad. In India, for example, cheappowerloom saris are sold as reputed Banarsee handloom sariswithin and outside Banaras, harming both the producers andconsumers of Banarsee handloom saris. While originalproducers suffer a loss of market for their goods, consumers end

up paying inflated prices for fake goods. Consumers usually donot have perfect access to information regarding the prices ofgoods, and even less so to the quality of the goods (Nelson,1970).In a situation like this, GI protection has the potential to eliminateinformation asymmetry and benefit both the producers and the

consumers (OECD, 2000). Once the goods are registered as GI,they will be protected under the GI Law and any violation on thisaccount would be tantamount to a legal offence. If the Act is

implemented effectively, it will act as a deterrent to unethicalproducers selling their low quality and cheap products free ridingon the reputation enjoyed by GI goods.The GI tag attached to products acts as a signaling device thathelps producers to differentiate their products from competingproducts in the market and enables them to build reputation andgoodwill around their products, which allows them to fetch apremium price. Eliminating information asymmetry is also therationale of another IPR: Trademarks. But, there are at least twomajor differences between Trademarks and GI. Firstly, whileTrademarks can be owned individually or by a group of people,GIs are collective rights owned by the concerned communities.Secondly, Trademarks can be transferred or assigned to another

right holder but GI rights are perpetual collective rights. Besides,since most of these GI goods or potential GI goods have theirorigin in rural areas, the increased sales of these goods as a resultof protection under the GI Act has the potential to lead toenhanced income to the producers' communities and hence torural development.

1Intellectual property Rights, very broadly, means the legal rights which result from intellectual activity in the industrial, scientific,literary and artistic fields. Countries have laws to protect intellectual property for two main reasons. One is to give statutory

expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations.The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and application of its results andto encourage fair trading which would contribute to economic and social development. (WIPO Intellectua;l Property Handbook;Policy, Law and Use)2The six IPRs are patents, copyrights, trademarks, Geographical indications, Industrial Designs and Trade secrets.3As defined in realm of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World TradeOrganisation (WTO)

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Historical Development

Socio-Economic Implications of GI in Developing Countries

The term 'geographical indication' (GI) is a relatively newconcept introduced by the TRIPS Agreement (WTO,1994).However, evidences suggest that the practice of using otherclosely related concepts existed even in the pre-industrial times.The concepts such as 'appellations of origin', 'indications ofsource' 'designations of origin' and 'protected geographicalindications' used names of places and distinctive signs for varietyof products as 'indications of geographical origin' (IGO). Forexample: Mt. Fuji sake and Pisa silk, Champagne, Florida Oranges,New Zealand lamb, Murano Glass, Swiss Watches, Bukharacarpets etc.Prior to the TRIPS agreement of the Uruguay round which

concluded in 1994, there were mainly three internationalconventions dealing with protection of IGOs, i.e. the ParisConvention for the Protection of Industrial Property (1883), theMadrid Agreement (1891) and the Lisbon Agreement for theProtection of Appellations of Origin and their InternationalRegistration (1958). While the Paris Convention and the MadridAgreement dealt with 'indications of source', the LisbonAgreement focused on protection of 'appellations of origin(Kasturi Das, 2006).In terms of providing global protection tothese IGOs, however, these multinational treaties offered limitedscope as these conventions were ratified only by few countries.Hence, signing of the TRIPS Agreement, which brought GI to the

fore in multilateral negotiations; by more than 150 membercountries was an important step forward for the internationalprotection of IGOs. The agreement provided the 'minimum'standards of protection for GIs (along with all other IPRs) backedby an enforcement mechanism.However, there remains the problem of a hierarchy in the levelsof protection based on an arbitrary and specious categorisationof goods under the TRIPS Agreement. In international tradenegotiations on IPRs, the European Union has always shownkeen interest and even aggression in seeking effective protectionto GI goods. The negotiations, particularly on the GI section ofthe TRIPS Agreement, were among the most difficult and this

stemmed from clear division between the main proponents of the TRIPS agreement-the US and EU. The European Unionconstantly emphasised on inclusion of GI in the TRIPS during theUruguay rounds of negotiation. The fact that GI was finallyincluded in the TRIPS agreement can be attributed to the EU'sremarkable negotiating capacity. The final outcome was tilted inthe interest of the European countries. The Current TRIPS textprovides a basic standard of protection to all other goods andhigher standards of protection to wines and spirits in which theyhave clear advantages. The EU and its member states have adiverse portfolio of over 6,000 protected GIs.

It is interesting to note that unlike other IPRs, the concept of GIhas been received favourably in the developing countries. Thepotential socio-economic benefits that GIs could accrue todeveloping countries have led many to believe that GI is the'sleeping beauty IPR' (WIPO, 2007). Research on socio-economic implications of GI for developing countries is scarceand it is evident that most socio-economic studies ofgeographical indications have been done in European countrieswhere the concept is well entrenched. Nevertheless, theliterature review of these socio-economic studies does still holdrelevance for their theoretical and methodological rigour and actas a guide-post. The key socio-economic issues relating togeographical indications particularly relevant to developingcountries are misappropriation, protecting traditional andindigenous knowledge and culture, improving market access,creating niche markets, protection of reputation, potentialincome effect and rural development.European policies and studies conducted in this area emphasizethe potential of GIs to improve rural livelihoods based on localresources (Pacciani et al, 2001) and thus, advance ruraldevelopment. Worldwide, rural communities have developedtypical products based on the interaction between traditional-

local know how (including selection, production and processing),cultural settings and particular environmental conditions such asthe soil and climate (World Bank Report, 2004). The marketmechanism, as it exists today, does not necessarily reward either these products or the producers.GI provides an effectiveframework to counter information asymmetry, leading to aprocess which can be viewed as 'Institutionalisation of Quality'that rewards such products and producers with premium prices.Numerous empirical studies indicate that consumers are willingto pay a premium for origin- guaranteed products. A consumersurvey done in Europe (WTO, 2004) revealed that 40 percentof consumers surveyed were willing to pay a premium as high as10 percent. Econometric studies have shown that consumersare ready to pay a high price premium for origin labelled wines.For instance, Bordeaux wine with 'Pomerol' designation,commanded a premium of $15 per bottle (Landon and Smith,1998) and wines from Napa Valley fetched 61 percent higherpremium than California wines (Bombrun and Sumner, 2003).The price premium is not restricted to wines alone. A study doneby Loureiro and McCluskey, 2000 on meat products indicates that Galician Veal commanded a premium upto $0.21 perkilogram. Whether this premium will lead to increased income

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Geographical Indication: The Indian Scenario

for producers actually depends on the capacity to implementeffective enforcement. While confirming GI as an effective strategic tool fordevelopment of rural enterprises, a study by the OECD (1995)pointed that the two main factors that influence the success ofsmall rural enterprises are: market access and sociallyconstructed differentiation. One of the effective approaches toaddress these factors is for the enterprises to work together inorder to develop a competitive advantage. This sort of collectivemonopoly achieved through GI enabled the French origin-labeled cheeses earn an average of two euros per kilo more thanFrench non-origin-labeled cheeses. French poulet de Bresse hasa market price four times higher than regular Frenchchicken.Producers of milk used for Comt cheese are paid 10percent over regular milk prices. Similarly, producers of ItalianToscano olive oil have managed to earn a premium of 20 per

cent since registration as a geographical indication in 1998 (EUBackground Note, 2004). The premium captured by productsdisplaying a geographical indication suggests that some form ofvalue is embedded in the use of GI which is a mixture ofeconomic, cultural and social values reflected in product-placelinkages. However, some studies also discovered that lesserknown and lower quality products may earn small or insignificantprice premiums, thus reinforcing the argument that GI

registration itself is not enough for exploiting commercialbenefits unless backed by promotional initiatives and qualitymaintenance mechanism (Loureiro and McCluskey, 2000).In the context of developing countries, GI goods reflect stronglinks with localized specific production assets derived from localculture as it characterizes the historical memory of the localpopulation and represents a catalyst of identity (Brard andMarchenay,1995). As such, GIs draw from both natural andhuman resources located within the territory, therebystimulating the rural economy. According to a study origin-labeled products are often considered useful instruments topreserve local culture and traditions and to foster ruraldevelopment, especially in disadvantaged areas (Pacciani et al,2001). According to the same study, the rural developmentimpact depends on the extent to which local actors succeed inappropriating the rent with respect to actors located outside the

territory. The potential of appropriating this rent is closely tied tothe ability of local actors to create institutional processes that canregulate the use of these free goods (Pacciani et al., 2001). Thus, the rural development potential of GIs is dependent on aninclusive and representative Producers' Association that ensuresparticipation of local actors and capacity building of the PAs so that they are able to capture more of the rents from theproduction and supply chain.

Unless a geographical indication is protected in the country of itsorigin, there is no obligation under the TRIPS agreement for theother countries to extend reciprocal protection. In India 'TheGeographical Indications of Goods (Registration and Protection)Act, 1999' (GI Act) was enacted in compliance with India'sobligations under TRIPS at the WTO. The GeographicalIndications of Goods (Registration and Protection) Act, 1999(Act 48 of 1999) came into force with effect from 15 September2003.This Act seeks to provide for the registration and betterprotection of Geographical Indications relating to goods in India

to fulfil three key objectives:1. Adequately protect the interest ofproducers of GI goods and add to the prosperity of theproducers of such goods, 2. Protect consumers from deception,and 3. Promote goods bearing GI in the export market.The Indian GI Act defines Geographical Indications in relation togoods as an indication which identifies such goods as agriculturalgoods, natural goods or manufactured goods as originating, ormanufactured in the territory of a country or a region or a localityin that territory where a given quality, reputation or othercharacteristics of such goods is essentially attributable to itsgeographical origin and in the case of manufactured goods whereone of the activities of either the production or of processing orpreparation of the goods concerned takes place in such territory,

region or locality, as the case may be. Goods include anyagricultural, natural or manufactured goods or any goods ofhandicraft or of the industry including food stuff.The salient features of the Act are mentioned under the

following sixteen points:1. Definitions and interpretation of several important terms likegeographical indications goods, producers, package, registeredproprietor, authorised user etc.,2. Provision for the establishment of a geographical IndicationsRegistry;3. Provision for the maintenance of a Register of geographicalIndications in two parts-part A and part B and use of computers,etc, for maintenance of such registers. While part A will containall registered geographical indicators ,part B will contain

particulars of registered authorised users;4. Registration of geographical indications of goods in specifiedclasses5. Prohibition of registration of certain geographical indications6. Provision for framing of rules by the central Government forfilling of applications, its content and matters relating tosubstantive examination of geographical indications applications;7. Compulsory advertisements of all accepted geographicalindications applications and for inviting objections;8. Registration of authorised users of registered geographicalindications and providing infringement action either by aregistered proprietor or authorised user;9. Provision for the renewal, rectification and restoration of

geographical indication and authorised use10. Provision for higher level of protection for notified goods11. Prohibition of assignment etc. of a geographical indications asit is public property

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Registration Process for GI goods

12. Prohibition of registration of geographical indications as atrade mark;13. Appeal against registrar decisions14. Provisions relating to offences and penalties15. Provisions detailing the effects of registration and the rightsconferred by registration;16. Provision for reciprocity, power of registrar, maintenance ofindex, protection of homonymous geographical indication, etc.To carry out the provision of this Act, the central Governmentnotified a set of rules in 2002. The Government of India hasestablished the 'Geographical Indications Registry' with all-Indiajurisdiction at Chennai, where the GIs can be registered. The

controller General of Patents, Designs and Trademarks, who isalso the registrar of Geographical Indication of India, isresponsible for administering the GI Act. Till March 2010, 120goods have been registered under the Act and many more are inthe pipeline. Some of the well known GI goods are 'Darjeeling'(tea), Pochhanpalli Ikat, Chanderi Handloom, 'Basmati' (rice),'Alphonso' (mango), etc. An exhaustive list of registered GIproducts is available online atFor the analysis, this brief has included the GIs registered tillMarch 2010 . For the list of GI goods registered under handicraftstill M arch 2010, see Annexure-1.

http://ipindia.nic.in/girindia/

Darjeeling Tea was the first good to be registered as a GI good inIndia. The need for Darjeeling Tea to get GI protection becamepronounced when it was discovered that the volume ofDarjeeling Tea being sold in international market was more than the volume being produced. This made it clear that grossmisappropriation by way of free riding on the brand reputationof Darjeeling Tea was taking place in the international market.The move for registration of Darjeeling Tea was initiated soonafter the GI Act came into force and the process of registrationwas relatively smooth because it was initiated by The Tea Boardof India which is a financially sound body and could afford hiringthe services of all required legal, scientific and other technicalexperts.The point which is being made here is that for GI registration, thenature and capacity of the applicant association is crucial. Oncethe need is felt for registration of a good as a GI good, the firstand foremost requirement is the existence of a credibleassociation that can be said to represent the interest of theproducers of the good under consideration. The Indian GI Actsays that any association of persons, producers, organization orauthority established by or under the law is eligible to apply for GIregistration. The applicant must represent the interest of theproducers. Producers are defined as persons dealing with the

following three categories of goods:1) Agricultural Goods include the production, processing, tradingor dealing;2) Natural Goods include exploiting, trading or dealing; and3) Handicrafts or Industrial goods include making, manufacturing,

trading or dealingThe second stage is the submission of application for registrationunder the GI Act, 1999. The due diligence exercise requires tremendous amount of time, energy, money and technicalexpertise. The application has to include details of specialcharacteristics of the product to convincingly prove theuniqueness and establish linkages between the product and itsplace of origin. The documentation process is extremely

rigorous and requires elaborate audio-visual documentation.Most of the lead applicants/producers do not have thecapacity/resources to undertake this process. Some applicants

hire legal and scientific experts to file the application on theirbehalf.After the preparation of application is completed, applicationscan be filed and submitted by a legal practitioner or a registeredagent and submitted to the Registrar of Geographical Indications,Chennai along with a prescribed fee. The application must be inwriting in triplicate in the prescribed format (available at

). The application has to be signed bythe applicant or his agent and accompanied by a statement ofcase.After the application is submitted, the examiner at the Registrar'soffice scans the application and deficiencies have to be correctedby the applicant within one month. The content of the statementof case is assessed by a consultative group of experts in the areaand an examination report is issued. Post this process, in case ofany objection, the Registrar communicates with the applicantand is given two months to respond or apply for a hearing. TheRegistrar may also withdraw an application after the hearing.Every application within three months of acceptance is publishedin the Geographical Indications Journal, which is bi-monthly andbi-lingual (Hindi and English) statutory publication. The Journalsare published on the Registrar of Geographical Indicationswebsite and any person can file a notice of opposition within

three months opposing the GI application published in thejournal. At this stage, the applicant can send a copy of counter-statement which can be accepted or result in abandoning of theapplication after a hearing.When an application of GI has been accepted, the Registrarregisters the geographical indication and the applicant is issued acertificate with the seal of the Geographical Indications Registry.A registered GI is valid for 10 years and can be renewed onpayment of renewal fee. Any person aggrieved by an order ordecision can file an appeal to the intellectual property appellateboard (IPAB) within three months. GI is a public propertybelonging to the producers and it cannot be transmitted,assigned or mortgaged. The Appellate Board or the Registrar of

GI has the power to remove the GI or an authorized user fromthe register (See Figure 1).

http://ipindia.nic.in/girindia/

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http://ipindia.nic.in/girindia/http://ipindia.nic.in/girindia/http://ipindia.nic.in/girindia/http://ipindia.nic.in/girindia/http://ipindia.nic.in/girindia/


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Figure 1: GI registration process in India

(Source: GI Registry office, Chennai)

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The Textile Committee of India has been spearheading anationwide campaign in India by creating awareness among

various stakeholders of Textile and Clothing sector on thebenefits of GI. The Committee identifies potential products andfacilitates GI registration of the products. Some GI registrationsthat the Committee has facilitated include Pochampally Ikkat,Lucknow Chikan Craft, Banaras Saree & Brocades of UttarPradesh etc. The Committee has also supported stategovernments of Kerala and Uttar Pradesh for registration ofsome of the products. In this context, three studies wereconducted by the Committee. The first focused on assessing theawareness among stakeholders on GIs and identifying potentialproducts for registration under the act. The study identifiedmore than 200 potential products for GI registration on the basisof threat perception. The second documented the specificationand uniqueness of various products, which included theproduction process, historical origin etc. The third study, iscurrently being undertaken, analyses the post GI implication forPochampally Ikat, Sholapur Chaddar and Terry Towels.

It is interesting to note (see Table 1) , that out of the total 120registered GIs so far, 80 (66%) belongs to the handicraft category

followed by agriculture 31 (26%), manufactured 7 (6%) and foodstuff (2%). Out of the total 28 states and 7 union territories ofIndia(see Table 2), products from only 18 states have beenregistered under the GI act. Not even a single product has beenregistered from 10 states and 7 union territories of India. WhileKarnataka has the maximum products registered (27), thenumber of registered products from some of the biggest stateswith rich cultural and traditional knowledge is dismal.Interestingly, only a single product (Peruvian Pisco, a wine fromPeru) from outside India has been registered seeking protectionwith the Indian GI Registry office.

Category Number of

registered products

Agriculture 31Handicrafts 80

Manufactured 7Food Stuff 2

Total 120

Table 1: Category wise registered GIs

Source: GI Registry Office, Chennai; as on August 2010


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State/Region Number of registered

products

West Bengal 7Kerala 13Tamil Nadu 18

Madhya Pradesh 4

Maharashtra 3

Orissa 5Karnataka 27

Rajasthan 5

Andhra Pradesh 12

Himachal Pradesh 3Bihar 4

Assam 2

Goa 1Uttar Pradesh 4

Gujarat 4

Chhattisgarh 3

Nagaland 1

Jammu and Kashmir 3Peru 1

Total 120

Table 2: State/Region wise distribution of GIs in India

Source: GI Registry Office, Chennai; as on August 2010

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The trends and patterns in the year wise distribution of GIs inIndia show (see Figure 2) that while there has been an overallincrease in the number of registered GI products, the increasehas not been consistent over the last 6 years. Only three (3)products were registered in the first year (2004-2005).Thenumber of products registered under GI recorded a significanceincrease in the year 2005-06. Twenty four (24) new products

were registered in the following year (2005-2006) but in thenext year 2006-2007, only 3 new products were registered. Theyear 2008-09 witnessed the maximum number of new productsregistered (45) .However, in the following year there was asignificant drop in the number of new GI product registration.Only 14 products were registered in the year 2009-10.

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2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Agricultural

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Manufactured

Food Stuff

Figure 2: Year Wise Distribution of Registered GIs in India

Source: Based on data from GI Office, Chennai; as on September 2010


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Issues & Concerns

There are a number of issues and concerns in the context ofharnessing the potential commercial benefits out of GIregistration in India. Perhaps the biggest concern is nearcomplete absence of an effective post-GI mechanism in thecountry. While domestic registration of a GI is a relatively easytask and there has been some progress on this account over thelast seven years, it is important to understand that onlyregistration of goods per se does not fulfil the objectives of theAct, unless it is backed by sound enforcement mechanism bothin domestic and export markets. In fact, the enforcement of theAct in other countries is a much more complicated venture as this may pose a variety of constraints including technicalities

involved in the registration process in various foreign countries;exorbitant expenses involved in appointing a watch-dog agency to get information on misappropriation; and huge financialresources needed for fighting legal battles in foreign lands(Kasturi Das, 2006). The Government's role is vital in the post-GI mechanism because without government support, mostproducer groups do not have the wherewithal to effectivelydefend or promote their GI brand. In India, perhaps only in thecase of one good i.e. Darjeeling Tea; the Tea Board has had somesuccess in defending against misappropriation in a few countriesbecause they have the financial capacity to do so.Though the Act defines the cases when a registered GI is said tobe infringed, it is silent on the mechanism and provisions to fight

against the infringement and this is an area where thegovernment needs to play a larger role. According to Dr.Rajnikant Dwivedi, Director of Human Welfare Association, anassociation based in Varanasi working with handloom weavers,benefits of GI protection under the GI Act will actually dependon how effective is the post-GI mechanism. Banarsee sareeweavers continue to be a distressed lot, idle looms have notbegun functioning and unscrupulous practices of selling imitationproducts in the name of Banarsee Saree have not beencurbed.GI has not delivered its proposed benefits as yet. Themoot question is 'Will GI be helpful in bringing back thosethousands of weavers back into this famous craft who gave upweaving as their livelihoods were destroyed due to almost the

same reasons GI protection is supposed to address?' Though it isa bit early to expect so much but even the associated optimismamong the weavers seems to be somewhat missing.The above concern highlights the facts that essentially the litmustest for GI is whether it can effectively protect and promote thelivelihood interests of the concerned producers or not, especiallythe poor producers. Mr. Anil Singh, Director-NEED, a Lucknowbased organisation and also an applicant in GI registration forLucknow Chikan Craft says that GI may leave the artisanscommunity completely high and dry as the awareness level onGI, the most basic recipe for success of any policy, is alarminglydismal. The post-GI mechanism must have adequate provisionfor promotion and continuous awareness building. Chikan Craft,being an eco-friendly, gender sensitive craft, has huge potential to

increase the bargaining power of the producers, however, thispotential has not been tapped. Attempts have been made by theState Government to tap this potential by merging GI promotionwith the department of tourism, promoting producer companiesand other promotional measures. However, these efforts remainrestricted to a few areas where civil society is active. One of thekey concerns that Mr. Singh points out is that a majority ofproducers do not have the capacity to report and fight aninfringement case.The Government has not made any headway in adoption ofstrategies for marketing and distribution of the product, itsbranding and promotion, especially in foreign countries. This

again is a herculean task, especially for the stakeholders from aresource-poor country like India. Success in exploiting theeconomic potential of a GI, to a great extent, depends oneffective marketing and promotional efforts to developconsumer perceptions about the 'niche' acquired by the producton account of product-place link. Building up reputation about aGI-product is not an easy task, however. It takes a lot of time,patience, money, quality control and a well crafted marketingstrategy to create a valuable GI brand. Champagne, for instance,took 150 years to build up reputation and goodwill.Currently, the action related to GI appears concentrated onregistration of GI goods and in many cases the stateGovernments are acting in haste. The identification and

registration is happening without adequate due diligence.Applicants often do not assess the commercial status/prospectof a GI product in the domestic and export markets; thepotential of its GI status in contributing to its future growth; and the socio-economic implications of its GI-protection for thecommunities involved in its supply chain. As a result, the largerand the real objectives of the Act are bypassed, often leading tofrivolous and inconsequential registration. Moreover, as GIs are acollective rights and not an individual right, the registrationprocess offers an opportunity for community level sensitizationand awareness. However, in the haste to register GIs, thisopportunity is lost. The awareness and involvement in theregistration process of even GI goods remain reduced to the

level of a few selected stakeholders. This has in some cases led toseriously erroneous omissions and commissions, defeating thelarger purpose of the GI Act. For instance, the map submittedwhile applying for GI registration of Bagh Print (already aregistered GI) excluded some areas where Bagh printing has

4existed for decades . Another error has been pointed out in thecase of Madhubani painting. Madhubani Painting on paper isregistered as GI under Class16 which implies that Madhubanipainting on cloth is not protected.Another lacuna is that the definition of 'Producer' in the Act doesnot distinguish between a real producer, retailer or dealer. As aresult of this discrepancy, the benefits of the Act may notpercolate down to the real producer. Various economicallypowerful intermediaries may still continue their control over

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4Pointed by Mr. Chinmaya Mishra in a planning Commission meeting held recently


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Recommendations

Extensive gaps exist on operationalizing GIs and this is where thefocus of the Government needs to be. Well-crafted policies andstrategies on post-GI mechanisms are required for marketing,distribution, branding and promotion of the Indian GI productsto realise the commercial potential of Indian GIs. There is theneed for setting up a national level fund for fighting againstinfringement, brand building and promotional efforts of GI

products.Best possible efforts should be made to sensitize and make theconcerned GI community aware through a series of workshopsand consultations to ensure maximum level active participationin the process for GI registration. This will in turn translate intosocio-economic benefits to the community flowing from GIregistration post-GI.In the wake of the deadlock existing at the multilateral tradenegotiations at the WTO, international trade is shifting towardsregional and bilateral free trade agreements and GIs are featuringprominently among the negotiation issues, including in theongoing Indo-EU FTA. In the light of these developments,rigorous analytical studies on impact and implications will prove

to be useful in chalking out negotiating positions for India.Existing empirical studies are predominantly done within theEuropean context and do not provide for the characteristics oforigin-labelled supply chains in developing countries. From apolicy perspective much empirical work remains to be done todetermine the direct and indirect impact of geographicalindications in the developing world. Systemic studies need to be

undertaken to study the real impact of the registered GI on theproducers' community and the potential impact of GI protectionfor the goods identified for production.The implications of GIs in the context of rural development inIndia need to be studied especially for sectors like agriculture,fisheries, crafts and artisanal works that provide livelihood for alarge section of the poor in India. Studies of the entire supplychain should be undertaken. Without a collective body ofempirical evidence on the impact of geographical indications,policy decisions in the developing world will remain uninformed,potentially producing unintended welfare impacts.

markets and the real producers may still be dependent on theseintermediaries for market access. Even if GI protection wouldyield financial benefits, in such a scenario, firms with superiorbargaining positions (located on the upper stream of the supplychain) may end up appropriating a disproportionate share of theeconomic value generated from securing protection (Ragnekar,2004).The knowledge underlying a GI remains in the public domain;hence misappropriation of the embedded knowledge is notprotected against. For example, in handicrafts, the technicalcontent will not be protected as a technical idea under the GI,while the cultural value as form of expression and its distinctivecharacteristics do get protection through marks or indications ofgeographical origin. Hence, GI should be considered as part of awider set of policies measures that seek to protect and reward

indigenous knowledge. If needed, the technical component ofthe handicraft could also be protected through other IPRs.There is a dearth of literature from an Indian perspective onpotential benefits from GI protection. While many studies havebeen done in Europe on the issue, hardly any systematicassessment has been undertaken by the relevant agencies in Indiawhile identifying the products to be accorded GI status. In theIndian context, studies are not available to address some of thepertinent questions related to GI and its development potentialsuch as: What are the price premium consumers are willing topay for goods protected under GI and given the ground realities,whether and how much the commercial benefits from GIprotection will percolate down to the downstream supply chain? What implication will GI protection have in for ruraldevelopment in India?

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References

Akerlof, A.G., 'The Market for Lemons: Quality, Uncertainty and theMarket Mechanism'. Quarterly Journal of Economics, 84 (August): 488-500, 1970.Cerkia Bramley, Estelle Bienbe and Johann Kirsten, The Economics ofGeographical Indications: Towards a Conceptual Framework forGeographical Research in Developing countries published in Economics

of Intellectual PropertyDas, Kasturi (2006), Protection of Geographical Indications: Anoverview of select Issues with Special reference to India, Working Paper,8;Centad,Delhi

Das, Kasturi (2009), Socioeconomic Implications of ProtectingGeographical Indications in India, WTO Centre, IIFT, New Delhi.EU Background Note, 'Why do Geographical Indications Matter to Us?'available at , 2004.Loureiro, M.L. and J.J. McCluskey, 'Assessing Consumer Response toProtected Geographical Identification Labelling', Agribusiness 16 (3):

309-20, 2000.Nelson, P., 'Information and Consumer Behaviour', Journal of PoliticalEconomy, 78 (March-April): 311-329, 1970.OECD, 'Appellations of Origin and Geographical Indications in OECD

http://jp.cec.eu.int/home/news_en_newsobj553.php
http://jp.cec.eu.int/home/news_en_newsobj553.phphttp://jp.cec.eu.int/home/news_en_newsobj553.phphttp://jp.cec.eu.int/home/news_en_newsobj553.php


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Member Countries: Economic and Legal Implications', Working Partyon Agricultural Policies and Markets of the Committee for Agriculture,Joint Working Party of the Committee for Agriculture and the TradeCommittee, COM/AGR/APM/TD/WP (2000)15/FINAL, Paris, 2000.

Pacciani, A., G. Belletti, A. Marescotti and S. Scaramuzzi, 'The Role ofTypical Products in Fostering Rural Development and the Effects ofRegulation (EEC) 2081/92', 73rd Seminar of the European Associationof Agricultural Economists, Ancona, Italy, June 28-30, 2001.Rangnekar, D, 'The Socio-Economics of Geographical Indications: AReview of Empirical Evidence from Europe',Capacity Building Project onIntellectual Property Rights and Sustainable Development,UNCTAD/ICTSD, October 2003b.Rangnekar, D.,'The International Protection of Geographical Indications:The Asian Experience', UNCTAD/ICTSD, Regional Dialogue onIntellectual Property Rights, Innovation and SustainableDevelopment, Hong Kong, SAR, Republic of China, November 8-10,2004.

WIPO Magazine, Geographical Indications: From Darjeeling to DohaJuly 2007World Trade Organization, 'Promoting Agricultural Competitivenessthrough Local Know-How' Workshop on Geographical Indications for

Middle Eastern and Northern African Agri-Food Products, World BankReport, Montpellier, June 2004. World Trade Organization, 'Exploring the Linkage between theDomestic Policy Environment and International Trade', World TradeR e p o r t , a v a i l a b l e a t

, 2004.Zografos, Daphne(2008);Geographical Indications and SocioeconomicDevelopment, Working Paper 3, IQsensato, U.K

http://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdf

Annexure - 1

Handicraft Products registered under Geographical Indications Act

S. No Application No. GeographicalIndications

Goods State

FROM APRIL 2004 MARCH 2005

1 3 Aranmula Kannadi Handicraft Kerala

2 4 Pochampalli Ikat Handicraft Andhra Pradesh


3 5 Salem Fabric Handicraft Tamil Nadu

4 7 Chanderi Fabric Handicraft Madhya Pradesh

5 8 Solapur Chaddar Handicraft Maharashtra

6 9 Solapur TerryTowel

Handicraft Maharashtra

7 10 Kotpad Handloomfabric

Handicraft Orissa

8 11 Mysore Silk Handicraft Karnataka

9 12 Kota Doria Handicraft Rajasthan10 15 Kancheepuram Silk Handicraft Tamil Nadu

11 16 Bhavani Jamakkalam Handicraft Tamil Nadu

12 19 Kullu Shawl Handicraft Himachal Pradesh

13 20 Bidriware Handicraft Karnataka

14 21 Madurai Sungudi Handicraft Tamil Nadu

15 22 Orissa Ikat Handicraft Orissa

16 23 Channapatna Toys& Dolls

Handicraft Karnataka

17 24 Mysore RosewoodInlay


18 28 SrikalahasthiKalamkari Handicraft Andhra Pradesh

19 31 Kasuti Embroidery Handicraft Karnataka

20 32 Mysore TraditionalPaintings

http://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdfhttp://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdfhttp://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdfhttp://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdf


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21 37 Madhubani Paintings Handicraft Bihar

FROM APRIL 2007 MARCH 200822 44 Kondapalli

BommalluHandicraft Andhra Pradesh

23 47 Thanjavur Paintings Handicraft Tamil Nadu

24 53 Silver Filigree ofKarimnagar

Handicraft Andhra Pradesh

25 54 Alleppey Coir Handicraft Kerala

26 55 Muga Silk Handicraft Assam

27 65 Temple Jewellery ofNagercoil

Handicraft Tamil Nadu

28 63 Thanjavur Art Plate Handicraft Tamil Nadu

29 76 Ilkal Sarees Handicraft Karnataka30 73 Applique Khatwa

Patch Work ofBihar

Handicraft Bihar

31 74 Sujini Embroidery Handicraft Bihar

32 75 Sikki Grass Work of

Bihar

Handicraft Bihar

33 52 Nakshi Kantha Handicraft West Bengal

34 60 Ganjifa cards ofMysore (Karnataka)


35 61 Navalgund Durries Handicraft Karnataka

36 62 Karnataka Bronze

Ware


37 77 Molakalmuru Sarees Handicraft Karnataka

38 94 Salem Silk known asSalem Venpattu


39 93 Kovai Cora Cotton Handicraft Tamil Nadu

40 92 Arani Silk Handicraft Tamil Nadu


41 83 Bastar Dhokra Handicraft Chattisgarh

42 84 Bastar Wooden

Craft

Handicraft Chattisgarh

43 91 Nirmal Toys andCraft


44 59 Maddalam ofPalakkad

Handicraft Kerala

45 58 Screw Pine Craft ofKerala

Handicraft Kerala

46 64 Swamimalai BronzeIcons


47 82 Bastar Iron Craft Handicraft Chattisgarh

48 87 Konark Stone

carving

Handicraft Orissa

49 88 Orissa Pattachitra Handicraft Orissa

50 90 MachilipatnamKalamkari


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ne

dBy:

Neha

Bhatnagar

+91

-9910888908ne

ha.

bhatnagar

27@gmai

l.com

All India Artisans and Craftworkers Welfare Association (AIACA)18, Community Centre,3rd Floor, East of kailash, New Delhi-110065

Tel: 91-11-26416492/93/94(extn: 115), Fax: 91-11-26416491www.aiacaonline.org

Prepared by Kumar Gautam ([email protected] ) &Nupur Bahl ([email protected])

56 98 Bagh Prints of

Madhya Pradesh

Handicraft Madhya Pradesh

57 100 Sankheda Furniture Handicraft Gujarat

58 101 Agates of Cambay Handicraft Gujarat59 102 Bell Metal Ware of

Datia andTikamgarh

Handicraft Madhya Pradesh

60 103 Kutch Embroidery Handicraft Gujarat

61 51 Kani Shawl Handicraft Jammu & Kashmir

62 79 Chamba Rumal Handicraft Himachal Pradesh

63 86 & 108 Pipli Applique Work Handicraft Orissa

64 89 Budiiti Bell & BrassCraft


65 96 Thanjavur Doll Handicraft Tamil Nadu

66 104 Santiniketan LeatherGoods

Handicraft West Bengal

67 105 Nirmal Furniture Handicraft Andhra Pradesh

68 106 Nirmal Paintings Handicraft Andhra Pradesh

69 107 Andhra PradeshLeather Puppetry


70 46 Kashmir Pashmina Handicraft Jammu & Kashmir

71 48 Kashmir SozaniCraft

Handicraft Jammu & Kashmir

72 119 Lucknow Chikan

Craft

Handicraft Uttar Pradesh

73 122 Uppada JamdaniSarees



74 128 Puneri Pagadi Handicraft Maharashtra

75 99 Banaras Brocadesand Sarees

Handicraft Uttar Pradesh

76 127 Tangaliya Shawl Handicraft Gujarat

77 138 Santipore Saree Handicraft West Bengal

78 144 Cannanore HomeFurnishings

Handicraft Kerala

79 147 Sanganeri HandBlock Printing

Handicraft Rajasthan

80 152 BalaramapuramSarees and FineCotton Fabrics

Handicraft Kerala

Aiaca_GIs of India_Socio Economic and Development Issues

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