That report is a perfect example of why people don't trust economists. It is about intellectual property, not drugs. As far as I can tell, it defines these transactions to be "counterfeit" because they violate patents, regardless of the content.

As Username says, this is an irrelevant statistic, even if true. The relevant claim from the report is that no third world country has less than 10% counterfeiting (compared to 1% in the US), though India is not specifically identified. Another relevant claim from WHO, that most illegal internet pharmacies that conceal their physical location are fraudulent, though this is a quasi-legal pharmacy that does not conceal its address (nor does nubrain).

I think most people using modafinil on LW are already using Indian brands. I have heard anecdotes of these brands are being counterfeited and I consider these much more relevant and reliable than these reports. Choosing to use Indian brands may be an error. But given that choice, I expect people shipping from India to be less likely to use counterfeit drugs than those shipping Indian brands from inside the US, since the difficult part of illegal drug distribution is usually crossing the border.