New Delhi: The Central Consumer Protection Authority (CCPA) plans to initiate a class action against companies that fail to meet quality standards, two people directly involved in the deliberations said. The country's top consumer watchdog is trying to curb substandard products flooding retail markets.
The proposed class action aims to hold such entities accountable and send a clear message about the importance of maintaining product quality for the benefit of consumers.
This proposal comes after the Ministry of Consumer Affairs noted that consumer durables companies are using different, substandard parts for products sold in tier II and tier III cities, making them less efficient than the parts approved during the quality test certification by the Bureau or Indian Standards. (BIS).
The department has also directed the Bureau of Indian Standards to improve its market surveillance activities. This includes increasing inspections, testing products more rigorously, and identifying cases where companies are violating quality standards. This initiative comes in response to growing concerns about the proliferation of low-quality goods in the market, which not only harms consumers but also undermines fair competition between manufacturers and retailers. The agency develops and publishes Indian standards, implements conformity assessment schemes, accredits and manages conformity assessment laboratories, and implements quality marks.
A class action refers to a lawsuit in which one or more individuals represent a group with similar claims against a party, often for damages caused by negligence or misconduct. It streamlines legal processes, ensures consistent results and allows those with smaller claims to seek collective justice, which typically involves consumer protection or workplace issues.
The CCPA has the power to take collective action under the provisions of the Consumer Protection Act, 2019. Specifically, under Section 10 of the Act, the CCPA can file complaints on behalf of affected consumers or take action to protect their rights collectively , allowing them to take class action when necessary.
“We have analyzed the complaints received at the National Consumer Helpline (NCH), which show a worrying trend. The complaints are against some of the reputed and globally acclaimed brands. The problems are mainly related to the dysfunction of consumer durables,” said the first of the two aforementioned people, who both spoke on condition of anonymity.
“Some complaints state that products stop working just a few months after purchase, which is really alarming,” this person said.
Falling standards
According to a joint report by Crisil and the Authentication Solution Providers Association (ASPA), released in January 2023, about 25-30% of all products sold in the country are counterfeit, with counterfeiting most prevalent in the apparel and FMCG sectors, followed by pharmaceuticals, automotive and consumer durables.
As many as 27% of consumers are unaware that products are counterfeit at the time of purchase, but 31% willingly buy counterfeit products, the report points out.
“This action is desperately needed, because India should not be a dumping ground. When a consumer pays the price for a quality product, there is no reason to mislead the consumer with substandard products,” the second person said.
However, both individuals refused to share information on the total number of complaints registered against reputed companies regarding sub-standard products and the names of the companies involved.
According to a report released by the Confederation of Indian Industry (CII) in September 2024, the Indian consumer durables market is expected to ₹5 trillion in FY30 and will be the fourth largest in the world by 2027. It is also estimated that the sector will create approximately 500,000 skilled jobs across the value chain by 2030.
“Consumers have the right to protection against misleading practices and substandard products. When companies fail to meet quality standards, they not only betray consumer trust, they also violate the core principles of fair trade. Class actions serve as a critical tool to hold such entities accountable and ensure justice for affected consumers,” said Manish K. Shubhay, partner at The Precept-Law Offices.
