Abstract

Intellectual Property Rights protect a firm’s brand, identity and their creations. IP laws protect these firms from imitation and exploitation and most importantly prevent hindrances from gaining profits from the products they develop. These laws play a very important role in protecting, assisting and promoting synonymous FMCG industries. An in-depth study of the impact of IP legislation on this particular sector will help drive this sector towards growth in international markets.

The issues on IP rights are examined in the context of problems faced by the FMCG sector. Some of these challenges include a lack of awareness regarding the benefits of brand registration under IP laws, information gaps in the word of law as well as administrative lags ranging from application processing to feedback on rejection. This paper has attempted to implore probable solutions that can resolve these problems, for instance, establishing awareness programmes for branding and copyright solutions as well as promoting councils for joint ventures between various types of service firms.

Introduction

This paper is a conjunction point of three parts- existing legislation, the FMCG industry and innovation in startups. All three sections are deeply connected. Startups are synonymous with innovation in the current economic ecosystem and Startups specifically in the industry of FMCG can drive growth within the industry as well as any auxiliary industries dependent on it. Legislation as a booster can incubate that growth to the point that local startups become international Unicorns. 

The Fast Moving Consumer Goods (FMCG) industry comprises firms that engage in producing, marketing and distributing goods that are sold quickly and are of relatively low cost. They consist of non-durable household goods and other consumables. The FMCG sector is the fourth largest industry in the Indian economy. In a deeply connected and evolving world that functions on the principles of globalisation, industries, especially FMCG that directly impact the lives of consumers have an unprecedented opportunity to expand their consumer base from one corner of the world to the entire globe. The structure of economies is changing as a result of blending cultures among societies. These changes create a space for the integration of local tastes on a global level, creating a demand-side consumer market. Despite these absolute conditions, FMCG is unable to support the supply side of this market. The challenges for the same are presented at various levels. The aspect of boosting growth within Startups coming up in the FMCG space is focused upon from the legislative perspective- Intellectual Property Rights.

Governments can introduce policies and pass laws to protect home-grown industries, however, protectionist or infant-industry policies are not long-term solutions. The only viable method to ensure the survival of domestic industries is to promote growth. Actions to encourage innovation and drive growth can lead Startups to a global level. IP laws are one such tool for ensuring a flourishing industry. Intellectual Property Rights (IP) are defined as the grant of legal rights to a creator or inventor for their creation or innovation, these rights can be conferred for a certain period and serve to enable the creator to utilise their creation fully. An IP for a common individual might be associated with high technological innovation, while that is a part of it IP also refers to copyrights, trademarks and various marks that signify a specific identity of a brand or company. Trademarks and copyrights under IP laws garner trust and goodwill among consumers, generating brand loyalty for the firms and their products. While IP laws can act as armour and boosters for startups, they come with problems. 

Literature Review

The historical criticism faced by intellectual property rights (IPR), particularly patents, and the subsequent shift in perspective towards recognizing their long-term benefits. Despite past opposition, there is now a consensus that IPR is crucial for societal progress, encouraging innovation, and promoting the circulation of creations. The argument is made that individuals, including governments, have a moral obligation to reward creators for their inventions while maintaining a balance with providing affordable technology. (Pundarik Mukhopadhaya et al, 2010)

The National Intellectual Property Rights (IPR) Policy 2016, adopted in May 2016, serves as a vision document guiding the development of IPRs in India. Several achievements have been noted, including the strengthening of institutional mechanisms by transferring the administration of certain acts to the Department of Industrial Policy and Promotion. Backlog reduction measures have led to significant decreases in pendency for patent and trademark applications. Automatic issuance of electronically generated certificates has been introduced. (“National IPR Policy”)

The Fast-Moving Consumer Goods (FMCG) sector is the fourth-largest sector in India, driven by consumer-oriented growth and increased prices, especially for essential products. As of December 2022, the FMCG sector reached a milestone of US$ 56.8 billion. Forecasts predict a Compound Annual Growth Rate (CAGR) of 27.9% from 2021 to 2027, with the total revenue expected to reach around US$ 615.87 billion by 2027.

In 2022, urban areas accounted for 65% of the annual FMCG sales, while rural India contributed over 35%. The sector is divided into three main segments: household and personal care products (50% of sales), healthcare (31-32%), and food and beverage products (18-19%). These segments significantly influence the nation’s economic landscape. (“FMCG Industry in India: Trends, Challenges, Solutions [2023]”)

This paper further explores how IP policies can induce growth by promoting innovation and R&D in startups within the FMCG sector. Challenges and recommendations for the same have been studied. 

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