An Indian recycling company which uses junk to create accessories is fighting a legal trademark suit launched by US clothing giant Gap Inc demanding that the firm change its name.

Green the Gap, an Indian company which runs three stores in the country, mainly sells accessories and home decor items made out of waste including beer cans, rubber tyres and fruit cartons.

Vimlendu Jha, founding owner of the firm, which also sells clothing for other brands, accused Gap in an interview last Friday of seeking to "bully" a small Indian company.

In March, the owners were slapped with a legal notice by Gap asking them to change their name and remove any reference to the company from their labels within 14 days.

A month later, the US retailer told the Indian firm it could keep its name for registration purposes but must remove any mention of Gap in their labelling and on their website, Jha said.

"Gap said our company is infringing upon their branding and that we are riding on their goodwill to create confusion in the minds of buyers," Jha told AFP.

"We were shocked and angered that a company of that size and stature and supposed respectability is getting threatened by a small business," he said.

The legal notice, a copy of which was seen by AFP, said Gap was "seriously concerned" about the adoption of its "well-known trademark" by the Indian entity.

K&S Partners, the law firm that issued the notice on behalf of Gap, was not immediately available for comment.

But Gap said it "does not comment on pending litigation" in response to an email query from AFP.

Jha added that Green the Gap's name was an environmental reference.

"We wanted to ask people is it possible to consume less and can we consume green? We upcycle trash which means we add value to junk by creating a new and useful product," he said, adding that the idea of competing with Gap was nowhere in their minds.

"For us 'gap' is a word in the English language that means void, absence. How can you monopolise a common English word?

"Next we will hear we can't use apple and orange in our lexicon. This is plain ridiculous."

He said the company was now in verbal negotiations with Gap to try to settle the dispute.

Jha launched Green the Gap five years ago as part of Swechha, an Indian advocacy group he set up to pursue environmental sustainability and proper pay for workers.

The name was inspired by a Swechha education scheme known as Bridge the Gap, said Jha.

Gap, which is the largest casual wear retailer in the United States with annual sales of over $15 billion, has some 3,000 outlets in 90 countries across the world. It also owns global brands such as Old Navy and Banana Republic.

Local media reports have said Gap plans to open stores in India some time next year, which would make it one of the biggest global brands to launch in the country.

India's government in the past few years has relaxed restrictions for international retailers to set up shop in the nation as it seeks more foreign investment.

India's trademark act stipulates that another company cannot sell products with an identical or confusingly similar label.

Jha said the US retailer's legal suit should ring alarm bells for the government.

"Opening up the market for larger players must not mean that smaller players are shut out," he said.