Exploring the Scope of Indian Licensing Space in Coming Years Is India leveraging the power of brand licensing properly?

By Aastha Singal

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Licensing is one of the most powerful business tools to brand expansion and Indian organizations are finally coming to accept the fact. While at a nascent stage, the nation's licensing landscape is slowly evolving, thanks to the better implementation of law and development of the pro-innovation ecosystem.

With the world becoming a global village, the licensing business has the capability to become a billion-dollar sector in the coming years. India can be at the forefront of this transition if positioned smartly by the enterprise and law. Here's how India can leverage the power of brand licensing properly.

Stronger Law Implementation

Since the National IP Policy was created in 2016, India has adequate IPR laws which subsequently became better after India acceded to the WIPO Internet Treaties, namely the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) in July 2018. However, enforcement of IPR and licensing in India is weak, time-consuming and costly, believes N Chandramouli, CEO, TRA Research.

"India needs to have a stronger implementation of its laws that is pro-innovation and if this happens you will see more inventors, discoverers and entrepreneurs invest more energy behind new creations. While the initial steps have been taken by policymakers, now the need is to ensure quick remedial measures for any form of infringement," he stated.

Further suggesting the solutions, Chandramouli added, "India needs to have many more Self-Regulatory-Organizations (SROs) which can assist innovators and License owners to prevent infringement." This licensing mafia is only going to become stronger over the years. To keep up, the law will also have to become much stronger, with similar stringent legal repercussions for license criminals.

Strength in Manufacturing

Indian companies looking to enter licensing agreements bet high on manufacturing. The low labour costs, growing disposable incomes, the significant market around IP rights etc have all worked well for the international brands giving away their years of reputation to licensees operating from India. "Licensing in India pretty much depends on our manufacturing strength," believes Pratyush Chinmoy, Head of Marketing, Onida.

The manufacturer or service provider that licenses a brand, character, design or another piece of intellectual property ancash on the marketing power it brings to the product. "It can take hundreds of thousands or millions of dollars to build a brand from scratch and licensing represents a way for a manufacturer to take advantage of all the brand building and image building that has gone on before."

The most obvious reason for the licensor to enter into the deal is to generate revenue from the guarantee and royalty payments. The market's going to grow with a lot of investment also flowing in and government policies changing for the better, Chinmoy concluded.

Leveraging the Evolution

People in India and across the globe are looking at various kinds of licenses based on the type of intellectual property and the manner in which they intend to grow their business. These could range from limited licenses, term restricted licenses to white labelling and the likes. Being an evolving space, Licensing promises further development and growth in both the technology market and the user market.

Shedding some light on the scope of licensing in India, Smriti Tipirneni, Associate Partner, Burgeon Law stated that it is a passive revenue opportunity. "Licensing could be a manner of ensuring a continuous revenue stream. The Licensor, as the owner of the intellectual property, may license it for a percentage of the revenue generated by the licensee in the form of royalty."

Space provides an opportunity to enter new markets. The Licensor may not be in a position to or interested in expending money to monetize on markets where other parties have an existing presence. Licensing the intellectual property allows the licensor to generate new revenues and access new markets through the licensee while remaining cost-effective.

For more insight into the world of licensing, the third edition of country's largest brand licensing platform - India Licensing Expo 2019 is all set to make a return on July 8-9,2019 at Bombay Convention & Exhibition Centre, Mumbai.

Register for the event here.

Wavy Line
Aastha Singal

Entrepreneur Staff

Former Features Writer

A business journalist looking to find happiness in the world of startups, investments, MSMEs and more. Officially started her career as a news reporter for News World India, Aastha had short stints with NDTV and NewsX. A true optimist seeking to make a difference, she is a comic junkie who'd rather watch a typical Bollywood masala than a Hollywood blockbuster. 

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