Adopting global standards to help India improve quality of goods: GTRI

Steps such as adoption of international standards, using risk-based regulations, and modern infrastructure development will help further improve quality of goods manufactured and exported from India, economic think tank GTRI said on Friday.

The Global Trade Research Initiative (GTRI) also recommended support to small and medium enterprises, avoiding quality control orders becoming non-tariff barriers, regulatory impact assessment, developing globally acceptable standards and inking mutual recognition pacts with trading partners to strengthen India's quality systems.

These suggestions come at a time when India is on the fast track to issue Quality Control Orders (QCOs) and Compulsory Registration Orders (CROs) with a view to curb imports of sub-standard goods from countries like China, boost domestic manufacturing and push exports of high-quality goods from the country.

GTRI Founder Ajay Srivastava said that to fully capitalise on these initiatives, it is crucial to comprehensively strengthen India's quality infrastructure as this will ensure that small firms are not overburdened, quality imports are not unfairly penalised, and adequate field infrastructure, such as testing labs, are in place.

According to the GTRI report, since introduction of the BIS Act in October 2017, over 140 QCOs have been issued for more than 550 products, compared to just 14 QCOs covering 106 products till 2014.

QCOs and CROs are regulatory measures used globally to ensure that products meet specific quality, safety, and performance standards before they are marketed and sold.

By enforcing strict adherence to quality criteria, they help mitigate risks associated with substandard products, enhance consumer trust, and facilitate international trade by aligning domestic products with global expectations.

"Issuance of over 140 QCOs covering over 550 products in the past 7 years have created challenges for the firms and the government agencies alike. This calls for an urgent need to upgrade India's quality infrastructure and a matter of fact study to understand how the QCOs have performed on ground and if there is need for any course correction," Srivastava said.

To further improve quality systems in India, "India should adopt and align its standards with international ones to enhance export competitiveness and seek international accreditation for BIS certifications to avoid additional costs for manufacturers," the report said.

It added that regulations should focus on essential health, safety, and environmental parameters and use a risk-based approach to balance enforcement with industry capacity.

Additionally, support for SMEs should include gradual implementation of QCOs and CROs, financial assistance, technical guidance, and phased implementation to help small firms comply, it said.

It also said that developing comprehensive quality infrastructure is essential for expertise, conformity assessment systems, and market surveillance.

"Standards and regulations should not act as non-tariff barriers, and regulatory impact assessments should be conducted to ensure regulations are effective and not burdensome. Creating high- quality, globally acceptable standards for products like Ayurveda and working towards global acceptance of Indian certifications will further improve quality systems," Srivastava said.

The report suggested the Bureau of Indian Standards (BIS) to adopt international standards wherever possible, such as those for electrical safety and toys as this will reduce transaction costs for companies and enhance export competitiveness.

"BIS and other Indian standards bodies should systematically align Indian standards with international ones by participating in organisations like ISO (International Organisation for Standardisation), IEC (International Electrotechnical Commission), ITU (International Telecommunication Union), Codex Alimentarius, World Organisation for Animal Health (OIE), and the International Plant Protection Convention (IPCC)," the report suggested.

It added that the BIS should seek accreditation to ensure that its certifications are internationally accepted.

Currently, many regulations under the BIS Act are based on ISO/IEC standards, but BIS certification is generally not accepted internationally due to a lack of accreditation. Achieving international acceptance will help manufacturers avoid the additional costs of seeking certification from other agencies, it said.

For supporting small and medium enterprises (SMEs), the report recommended providing financial assistance, technical guidance, and phased implementation to help SMEs comply with these orders as its support will help small firms upgrade manufacturing processes, acquire new equipment, and adhere to stringent standards.

"In industries like footwear, where 80 per cent of shoe-making units are small-scale operations, provide support to meet QCO requirements. These small units may find it difficult to meet the strict QCO requirements and could face shutdowns if they cannot comply. Even if they are exempt from QCO application, large brands won't buy from them unless they meet the requirements," Srivastava said.

Further, it asked to ensure that standards and technical regulations do not act as non-tariff barriers.

Many countries use the mandatory certification to check imports. China often uses this process to delay grant of permission for imports from specific countries.

"In India, for example, factory inspections are an integral part of the regulatory framework for implementing CROs. BIS conducts factory inspections, but the timelines and processes vary based on priority and available resources. Foreign firms have often raised complaints about delayed registrations," it said.

The report recommended signing Mutual Recognition Agreements (MRAs) with important trading partners as these agreements will help make domestic laws acceptable to countries with different regulations, facilitating smoother international trade.

For example, an MRA between India and the European Union in medicines would allow EU drug inspectors to accept inspection reports prepared in India using standard procedures, and vice versa, it said.

"Implementing these recommendations will improve quality systems in India, reduce the burden on small firms, and enhance the global competitiveness of Indian industries," Srivastava said.