Report on Grey Market: Assessing Sales and Tax Losses in India

This report investigates the impact of the grey market on the Indian economy, focusing on sales and tax losses across various sectors including auto components, alcohol, computer hardware, and FMCG. The study defines the grey market, differentiating it from black markets, and highlights its effects on industry and government revenue. It presents data on sales and tax losses, supported by statistical analysis including a chi-square test to determine the association between the original market and losses. The research identifies factors driving the demand for grey goods, from consumer demand to supply-side issues, and suggests enhancing regulatory mechanisms, increasing penalties, and empowering investigative agencies. The conclusion emphasizes that addressing the gap between consumption and supply, along with consumer education and awareness, is crucial to mitigate the negative impacts of the grey market on the Indian economy.

 Three sectors – Economy Development.
 Role of Marketing
 The Grey market –Emerging Market
 Impact
 Affecting almost all sectors
“Crime of the 21st Century”
INTRODUCTION

“A market where a product is bought
and sold outside of the manufacturer
authorized trading channels is known
as Grey Market”
(if a store owner is an unauthorized dealer of a
certain high-end products brand, the product
is considered to be sold in the grey market. If
the product is illegal, it would be selling on
the "black market".)

“The product imported or purchase from
manufacturers and sold it through common
channel other than distribution channel is
known as Grey Product”.
“Another indication of a Gray product would
be photocopied manuals or manually create
that always provide professionally printed o
duplicated materials with genuine products”
 Grey products are not designed to be sold in a
particular market
 The authorized importer may not be equipped to
provide service & support.

 India is being the largest supplier of Grey
medicines
 Highest illegal trades of cigarettes.
 Grey products with ‘Made in India’ label and
manufactured in China
 Complaints - Raymond, Boroplus,JK Files and
Tools brands and Kama Sutra brands
etc.against Grey products.
 Chinese company had copied the brand
Onida

In this context this paper focuses on the
concept of Grey market
Two parameters are –
Grey market and its impact on Indian
economy in the form of
Sales losses to industry and
Tax losses to government.

The study is based on the following objectives
 To understand the concept of Grey Market
 To analyze the association between the grey
market and losses to Industry and Government

The following Experimental and Null hypothesis
framed in this paper
 He - There is an association between Original
market of goods and service and no loss to industry
and government.
 H0 - There is no association between Original
market of goods and service and no loss to industry
and government.

 The experimental method

Random sampling method is used for
selection of the units and respondents
 Seven sectors of market are selected
Auto Components, Alcohol, Computer
Hardware, FMCG (Personal Goods), FMCG
(Packaged Goods) , Mobile Phones, Tobacco.
 The primary data –Total 314 respondents
from above sectors have opined. Of these
186 respondents having Grey products, and
from 128 respondents having original
products.

 To test the hypotheses, chi-square Test