Underwriters Labs bets on Indian renewables space

UL India, a safety consulting and certification company, is counting on new rules planned by the government for a third-party certification to grow in the country, along with a focus on renewable energy, electronic transactions and ensuring the safety of buildings, said Suresh Sugavanam, vice president and MD, South Asia.

A wholly-owned subsidiary of Illinois-based Underwriters Laboratories, the company plans to expand to new cities in India and Bangladesh and is gradually getting into advising companies about safety compliance at an early stage, Mr. Sugavanam said in an interview.

“We are primarily a testing body now. However, with the new BIS Act..., it has the provisions to allow third parties such as us to also act a certification agency,” he said.

The testing, inspection and certification market is expected to be worth $247.94 billion by 2023, according to a report by MarketsandMarkets.

It is expected to grow at a CAGR of 5.02% from $184.77 billion in 2017.

The growth will be mainly driven by harmonisation of standards, growing consumption of goods in emerging countries and imposition of rigorous government regulations across various sectors.

“There are areas..., for example in medical devices, one or two areas have been approved [by India] but business is yet to start. Indian medical rules came into effect in January this year. Medical devices are very complex as they go from simple gloves to syringes and CT scans. Anything that goes into the body is of extreme risk.

“For certain low-risk categories, the Indian government is allowing third-party certification. That is starting. We are awaiting clearance... It may take a few months. They go through their checks and process,” Mr. Sugavanam said.

Testing labs

UL South Asia has set up four multi-speciality labs in India. These laboratories test products ranging from electricals to garments and shoes. Four such labs are in India — three in Bengaluru and one in Gurugram.

The fifth laboratory for textiles is based out of Dhaka.

The Indian government’s decision to allow third-party certification would be one of the drivers of growth, he said, The parent firm is a not-for-profit organisation focussed on research, outreach, setting standards and educating the customer.

Rather than advising clients after a product is developed, UL South Asia is helping them comply with safety, security, and sustainability at the research and development stage, he said.

“We constantly look at... cost of compliance. If it is a mobile phone, we have to test its electrical [connections], the radiation and the communication protocols, whether its Bluetooth will work with the audio and the car...

Cost of non-compliance

“At the same time, you also look at the cost of non-compliance. If you eventually end up launching a product which is not compliant with the standards and therefore, if it catches fire when you charge or if it creates excessive radiation, it damages not just reputation but your company can be completely obliterated. The cost of compliance as a rule of thumb for any product is about 0.1% of the revenue. The cost of non-compliance will be much bigger.”

UL South Asia is working with 30 medical start-ups at an early stage.

“If you are designing a product in India, some of these... don’t even have a regulation. Frankly, you and I can make a blood glucose monitor in our backyard and sell. Nobody is going to ask a question in India. If you sell these devices in the Middle East there are rules you [have] to follow. USFDA is even more strict.”

Mr. Sugavanam said the opportunity for renewable energy and transaction security was “huge” in India.

“Renewable energy in India will be huge for at least the next six to seven years. If you look at the pace at which wind and solar energy is growing, the grid connectors and other applications for the solar industry is growing at the same pace at which the wind sector went through in the nineties. That creates a growth area for us.

“The other space we are actively looking at the moment is the whole security space. One is the transaction security. Today you got all kinds of electronic transactions right from mobile wallets and apps on the phone. There are so many players involved in this. There is the government then there is the National Payments Corporation of India and then the banks, mobile wallet companies…the list is endless,” Mr. Sugavanam said.

“The third one where the traction is slower than we would like that is about ensuring the safety of building infrastructure. Today we spend about 80% of our time in built environments such as homes or movie theatres or offices. From structural integrity to fire safety. “