In India, counterfeit automotive and industrial components -- particularly bearings -- have become such a large proportion of total retail-level sales that branded manufacturers and their distributors are redoubling their efforts to attack the problem.

Government estimates put the percentage of counterfeit bearings on the market at any one time between 15% and 30%. Industry trade groups argue those estimates are far too low, that the actual market being taken by counterfeiters is more likely between 35% and 50%.

Counterfeits are increasingly under attack, but they are also increasingly more difficult to tease from the supply chain. Bearing counterfeiters, for example, most often smuggle their bearings in from China.

If the bearings arrive unmarked, large shipments are divided into smaller deliveries, which are then parceled out to a network of small machine shops, many equipped with laser engraving equipment. Those shops put the counterfeit markings on the bearings, and often also wrap the individual bearings so they are ready for packaging and the counterfeit markings are hidden.

Dividing the work among a network of small shops is the first step making counterfeits harder to stop. With many small shops involved, discovery and seizure will only have a limited impact on the whole. Also, a network of small shops creates a de facto secondary distribution network of its own; and the more who depend upon income from counterfeiting, the less likely authorities are to be tipped off.

If the bearings arrive already counterfeit marked and wrapped, they are parceled straight to the packagers. Another network of small print shops counterfeits the packaging and labeling, working the bearings in smaller batches.

At this point, the more sophisticated counterfeiters have been able to insert the counterfeit bearings into legitimate or traditional supply chains, usually by cash bribes to buyers. The counterfeits can also be distributed separately as an undocumented "second line" to trusted distributors and retailers. Counterfeits through these channels also tend to be much higher quality, and will try to sell to unsuspecting buyers at nearly the same price as the real thing.

The less sophisticated operators will take the bearings and parcel them out across hundreds of small shops and bazaars where an odd synergy exists -- they are presented as name brand bearings, but for the price, buyers also don't expect them to be.

But gradually, counterfeiters have become more savvy, better financed, with better logistics, and very often computer-managed inventory control and distribution. With the rewards growing, there is also increased competition among counterfeiters. Ironically, this has led to counterfeits which are higher quality, and often virtually indistinguishable from the real thing -- at least, on the surface. With better logistics and distribution, they have become even harder to pin down.

Wading into this battle, the 600-strong companies of India's Automotive Component Manufacturers Association [website] have directly initiated and assisted authorities in at least 160 counterfeit parts raids across India in 2009. And the organization said it is instituting a policy that members become even more involved in 2010.

Meanwhile, a number of manufacturers have begun working together to share information and coordinate raids. Delux Bearings, GKN Driveshafts, Lucas, Delphi-TVS, Brakes India, and Talbros Automotive have formed a group to work together in initiating more raids in 2010, and so those raids are the most productive they can be.

Another growing challenge, a result of the global economic downturn, is counterfeits that aren't. When a factory is producing OEM parts, but orders slow down, there can be a strong temptation to continue production at the old level, and simply the extra parts directly into the aftermarket as OEM. OEMs have only recently begun paying more attention to policing this vendor problem before it gets out of control.