Electronics exporters to EU stare at a RoHS block

Ever heard of RoHS? Well, those exporting or planning to export electronic items to the European Union (EU) had better.

In July 2006, a legislation by European Commission (EC) on the restrictions of the use of hazardous substances (RoHS) will come into effect.

Products sold from then on in the EU will not be allowed to contain more than 0.1 per cent lead, mercury, chromium VI, polybrominated biphenyls (PBB), polybrominated diphenyl ethers (PBDE) and 0.01 per cent cadmium.

The legislation will affect all companies that use electronics in their products. The products that will be affected include household appliances, IT and communications equipment, lighting, electrical and electronic equipments, toys, and sports equipment among others.

This means that countries exporting electronics and IT hardware products to the EU will also have their products rejected, if they do not comply with the standards. As the leading electronics component manufacturer, Japan has already started modifying its processes to manufacture lead-free products.

But has India, which is targeting a $50 billion demand for IT hardware products by 2008 and is expecting its electronic hardware sector to touch $62 billion by 2010, prepared itself for the legislation?

T S Ushasri, managing director of Force Computers (India) Pvt Ltd, says, "There is very low awareness in India about the legislation and this means that not many Indian companies are ready for it. Many companies do not realise to what extent they will have to change their manufacturing processes to comply with the directive."

Force Computers is a part of the embedded communications computing group of telecoms giant Motorola.

However, Telecom Equipments Manufacturers Association of India (Tema) chairman N K Goyal believes that the legislation will not affect Indian manufacturing companies as not only are there very few hardware manufacturing companies in the country, but their exports to Europe are also minimal.

Goyal added that Tema would, nevertheless, recommend a similar legislation for India too, so that there is some standard for approvals for hardware product imports in the country. "Today we import about 2,000 crore cell phone batteries every year. If we can restrict imports through such legislation, domestic manufacturing companies will get a major boost," Goyal said.

Companies such as the Hyderabad-based MosChip Semiconductor Technology Ltd have started to fall in line. C Dayakar Reddy, managing director of MosChip, said, "We have started manufacturing some products without lead. We use tungsten instead to produce chips and printed circuit boards. Lead, however, comprises only a nominal percentage of the products. So even if Indian companies have to ensure that lead is not used in their products, it will only increase their manufacturing cost by about five per cent."

The fact, however, remains that awareness levels regarding this legislation are very low among the Indian companies.

A case in point is that when Ushasri asked the delegates attending the e-Hardware summit organised by the Confederation of Indian Industry (CII), if they were aware of the legislation, only three delegates among the 40-odd, raised their hands.

If India is targeting huge exports in the IT hardware and electronics sector, it is time that it buckles up to meet the standards of the RoHS legislation, not just for increasing exports revenue, but also for complying with environment-friendly standards.

What is RoHS?

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• RoHS stands for restrictions of the use of hazardous substances. It is a legislation by the European Commission which will come into effect from July 2006.
• Products sold in the EU after then will not be allowed to contain more than 0.1 per cent lead, mercury, chromium VI, polybrominated biphenyls, polybrominated diphenyl ethers and 0.01 per cent cadmium.
• Countries exporting electronics and IT hardware products to the EU will have their products rejected if they do not comply with the standards.
• India is targeting a $50 billion demand for IT hardware products by 2008 and is expecting its electronic hardware sector to touch $62 billion by 2010.