Export hurdles pinch

NON-TARIFF BARRIERS: Small exporters are battling fast-changing certification and testing norms to access EU and US markets

The increasing instances of non-tariff barriers (NTB) being imposed by India's largest trading partners, the European Union and the United States, is begining to worry Indian exporters and small scale entrepreneurs.

In recent months, several instances of NTBs imposed on Indian exporters have been reported, ranging from stringent certification for products and processes to sudden changes in toxicological data to be supplied with chemical exports.

Says Shyam Saraf, president of the Federation of Indian Export Organisations, western region, "A number of new non-tariff barriers have come to light in the last few months, especially in the textile industry. Practices such as spot surveys by big buyers like Wal mart or J C Penney to check compliance on child labour norms and new certifications like the Oekotex which tests the chemical compostion of fibres and dyes, are putting up additional barriers to Indian textile and agro exports. A certification like Oekotex costs around Rs 10 lakh. As no similar certification is available in India, we have to go to Europe to get the certificate."

The agri-feed industry which has found an increasingly receptive market in the EU for its herb based products is also facing similar restrictions.

The new certification, Fami-qs, has become mandatory for all feed exports to the EU, but the standards are so stringent that only one Indian company has managed to get it so far. Other NTBs imposed by the EU include labelling norms, sanitary and phytosanitary (SPS) conditions, involving the use of pesticides.

The auto components industry is also facing barriers such as a new rule stating that only serially numbered components can be exported. For the textile industry, NTBs include shipments being subjected to rigorous labelling and marking requirements, security parameters and document verification at US and EU ports and issues relating to compliance with labour and environmental norms.

Says a Mumbai based manufacturer-exporter of bio-feeds, "These restrictions are at the core of EU's policies. Consumer safety norms and ethical business practices are increasingly being used as a trade barrier."

A recent Unctad survey shows that 80 per cent of the standards imposed on the developing countries are voluntary and private initiatives. Several instances of clampdown on export consignments in the US have also been brought to the government's notice, resulting in delayed shipments.

Says Saraf, "As long as the the government does not take up our case, there is nothing we can do but to keep complying with these norms. But eventually, these restrictions will hit the smaller Indian exporters and make them uncompetitive in these markets."