The impact of Geographical Identification tags on Indian local markets and economies

Geographical Indications (herein referred to as G.I.) is a tool that enhances and maintains the oddity of a particular kind of product that arises from a specific location and is widely known as the speciality of that particular location. These G.I. tags are often backed and supported by traditions and cultural practices. This helps the product to maintain its originality and quality. The concept of G.I. Tags was established to secure and protect these geographical and landmark-specific products from being imitated or misrepresented under a false name. G.I. Tags are essential in India as it is a nation with diverse cultural and traditional backgrounds, hence protecting our intellectual property. Geographical indications bring a sense of security that protects unique property that belongs to a particular geographical location, increasing its value in the market. Due to a surge in the product’s value, its fineness and quality also increase the demand for such products.

The Geographical Indications of Goods ( Registration and Protection) Act,1999 provides provisions that prevent the G.I. Tags from being violated and misused. It protects terms like Mysore Silk, Nagpur Oranges, Darjeeling Tea, Coorg Coffee, etc., from infringement, as the products mentioned above are unique to a particular city or geographical location.

By throwing more light on the market economy and local market, it can be noted that G.I. tags have a significant impact. GI tags create a sense of uniqueness and distinctive character for a particular product, increasing its quality compared to the same product found anywhere else. To those who can afford it, such extensive quality can be a significant plus point regardless of the product’s cost. This, in turn, enhances the economy and promotes the product even more.

GI tags are usually given to products of the highest standard, creating a niche market with minimal consumer reach and higher rates and prices. This promotes the economic growth of that particular geographical location. Almost all GI Tags in India belong to small cities or towns with a minimal population and an even more minimal market. Hence, these GI tags recognize these towns and cities and attract income from consumers willing to pay extremely high prices for an excellent quality product. This increases the income and economy of the local artisans and the local market. It enhances income and provides good job opportunities. Hence, the local or rural economy flourishes and gains much-needed exposure and income. Products with a GI Tag have very competitive markets, and several companies are trying to meet the benchmark in terms of product quality and demand.

Additionally, GI-tagged products lead to income growth of the local artisans and farmers involved in coming up with the product, hence encouraging them to produce more goods of similar quality, if not better. GI tags also help ensure that the culture and tradition of a particular geographical location are maintained and not misused. It protects the livelihood of many and enhances job opportunities while still maintaining its individuality.

Darjeeling Tea is one such  example. This was the first product from India to be granted the GI tag in 2004. It was later transformed into a Rolaids legend of how a GI can increase the value of a product. After receiving the tag, the price of Darjeeling tea rose five-fold, proving the gross economic gains.Additionally,  Channapatna is famous for its craft of wooden toys and dolls, which received a Geographical Indication [GI] tag, giving the artisans recognition internationally. The GI has created marketing opportunities for these toys in the global market while maintaining craftsmanship and promoting improvement in the earnings of the artisans.Pochampally Ikkat is a traditional handloom fabric emerged from the traditional handloom fabric because of the GI recognition. The Pochampally Ikat industry now supports over 5,000 weavers who have received better wages and higher demand in the industry and its products.

The effects of Geographical Indication (GI) tags on local markets and economic systems are enormous since they are used to safeguard and market products that have specific characteristics related to their geographic location. From the above discussion, it is evident that GIs can be applied in almost all sectors, most strikingly in agriculture, handicrafts, and food production.GI tags lead to premium pricing of the produced goods and create a distinctive market to sell such products. This is because GI tags provide distinction in the marketplace, giving the producer a premium price since the product is genuine and well-branded. For instance, after obtaining the GI tag, Darjeeling tea saw its price being raised to fivefold. The boards indicated that this premium positioning enables local producers to tap niche markets in the domestic and global markets.It provides  local employment and livelihood opportunities.The identity protects heritage arts and farming customs, thus creating jobs to rural people. In the case of Pochampally Ikat in Telangana, 5 thousand weavers, having upgraded their handloom sari business, have received better wages and employment​.  Likewise, the Nagpur oranges tagged with GI have an employment generation story of doubling the number of farmers involved in their production. Cultural and Heritage Preservation is also enhanced through geographical indications. G.I. thus not only shields economic stakes but also helps save cultural identity as knowledge and practices are being shielded. This has been evident in Channapatna toys that an age-old craft has been given a new lease of life due to the GI tag, and artisans have a global platform​.There’s an increased export potential as these products are usually popular in the export markets because they possess unique qualities from all the other products. Take, for example, basmati rice, which is now one of India’s major export products, and this has dramatically implied foreign exchange export revenue because of the GI tag it enjoys. This increase in exports assists in enhancing the region’s general economy​.

In the case of Consortium for Darjeeling Tea v. ITC Ltd.: The Darjeeling Tea Producers’ Association filed a case against ITC for trying to capitalise on the trademark by calling its garments ‘Darjeeling Tea.’ The recent judicial decision in this case favoured the tea producers and provided sharper edges for the protection of the GI tag. This case is a good example of how G.I. can protect an industry from misrepresentation by an unrelated industry.

In the leading case of Rasna Pvt. Ltd. v. Kishore Wadhwani ,the details of this case involved the use of a geographical indicator in the brand name of a beverage company that used the GI-protected Nagpur oranges to manufacture its product but misled the consumers by calling it Nagpur oranges. The court supported the farmers, which implied that the brand could not use the Nagpur orange GI tag . Further, Nagpur Orange was granted a Geographical Indication tag by 2003’s Prevention of Trade and Merchandise Act Part I Section 2 Challenges and Future Scope

However, there are issues of reform in the GI laws enforcement in India, although there are success stories. The problem of counterfeiting persists; inbound products with fake seals flood the market, compromising the quality of genuine GI products. In addition, issues of access and enforcement of GIs remain a challenge, especially for small-scale producers.

GIs’ future depends on these inter-organizations and improved consciousness among organizations and society. Thus, increasing the measures that support enforcement and extending the list of products that can be registered as a GI could help India develop this instrument to improve rural areas and preserve culture.

Geographical Indications are more than a legal instrument; protecting geographical indications safeguards tradition and helps stimulate growth in regions. GI tags, as seen in India, have enhanced traditional arts and agriculture-based products, providing a better living standard to the workers and farmers. In the same regard, continuing efforts to protect and market the GI products will guarantee that other groups of citizens within the country will reap the benefits of this legal protection.

Author: Trisha Manoj, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing