Once a genuine branded product is sold, the trademark owner’s control over that item runs out — it is “exhausted.” India applies this globally: goods sold anywhere in the world can be resold here. That makes India a parallel-imports friendly market.
The doctrine of exhaustion
The principle: “once purchased legitimately, the trademark owner… cannot prevent sale of such good, as the exclusive right to sell goods bearing the mark is ‘exhausted’ by the first sale.” Internationally there are three modes:
- International exhaustion — the whole world is one market; a sale anywhere exhausts rights globally.
- Regional exhaustion — exhaustion within a defined region (adopted by the EU).
- National exhaustion — exhaustion only within the domestic market after first sale by/with the owner’s consent.
India’s position — international exhaustion
Section 30(3)–(4) of the Trade Marks Act, 1999 governs post-sale rights. The landmark Kapil Wadhwa v. Samsung Electronics established that India follows international exhaustion, holding that “the scope of the expression ‘the market’ in Section 30(3) is not limited to domestic markets.”
Earlier cases had injuncted genuine-product imports; Kapil Wadhwa shifted the landscape — genuine parallel imports are permissible in India.
The debate: national vs international
There are arguments both ways:
- For national exhaustion — protects domestic licensees, avoids consumer confusion over country-specific product variants, and can encourage foreign investment.
- For international exhaustion (India’s choice) — promotes consumer benefit and competitive pricing through parallel imports.
What it means in practice
- Genuine goods can be parallel-imported into India and resold — the owner cannot block them merely for being sourced abroad.
- But “genuine” is the key. Exhaustion protects genuine goods put on the market with consent; it does not shield counterfeits, and note the limits where goods are materially altered (Section 30(4) — see our note on refurbished goods).
- Brand owners must plan for grey-market flows — differential pricing across countries invites parallel imports into India.
Frequently asked questions
Does India allow parallel imports of branded goods? Yes. India follows international exhaustion (Kapil Wadhwa v. Samsung), so genuine goods sold anywhere can generally be imported and resold here.
What is the doctrine of exhaustion? That a trademark owner’s right to control a specific product is used up (“exhausted”) after the first legitimate sale of that item.
What is the difference between national and international exhaustion? National exhaustion limits it to first sale in the domestic market; international exhaustion treats a sale anywhere in the world as exhausting the right.
Does exhaustion protect counterfeits or altered goods? No. It protects genuine goods sold with consent; counterfeits are not covered, and materially altered goods can fall outside it (Section 30(4)).
Legislation referred to
- The Trade Marks Act, 1999