Understanding standards: Facilitating acceptance of Indian goods abroad

By Anil Jauhri

As noted in my previous column (‘Setting standards: Towards global acceptance of Indian products’, FE, January 11, 2021; https://bit.ly/3nQdoFR), the challenge of meeting global regulations is not the only challenge India faces in accessing the world market. There are two more challenges that may impede Indian exports.

One of these is the market demand for voluntary standards and certifications, which are generally private because in developed economies governments rightly focus their energies on good regulations. The interesting aspect of voluntary standards is that these are demanded in the market even in regulated sectors, so it is not enough to meet European regulations on food, stringent as they are, but also meet such private standards as FSSC 22000 or BRCGS or IFS. A similar situation exists in forest produce where not only regulations related to legality of wood have to be met with, but voluntary forest certification has become a de facto requirement in the developed markets. Such private standards, now called private sustainability standards, address concerns related to environmental compliances, fair wages, worker safety, fair trade practices, etc, and are becoming increasingly a prerequisite in developed societies. It would not be long before these become prerequisites in the Indian market as well, as ISO 9001 became one after initially being touted as a gateway to the European market.

The above are in addition to internationally recognised certifications like ISO 9001 for quality management systems or ISO 14001 for environment management systems or ISO 45001 for occupational health and safety management systems, and industry standards like IATF 16949 in the automotive sector or AS 9100 in the aerospace sector, which are much sought after in voluntary sectors.

Some of these private standards allow development of local schemes and benchmarking like GlobalGAP for good agricultural practices or the Programme for the Endorsement of Forest Certification (PEFC) for sustainable forest management that impacts all wood and forest products like furniture, paper and handicrafts. It is here that India is yet to figure out an effective strategy; despite having a national scheme IndGAP premium certification of QCI which is on a par with GlobalGAP or the forest management certification of the Network for Certification and Conservation of Forests (NCCF), which commendably has been benchmarked by the PEFC, India is yet to leverage them to the benefit of its industry. It has to be recognised that local schemes bring down costs of compliance for the industry and make them more competitive in the global market.

It is commonly believed in India that our industry faces the challenge of meeting global standards as the biggest one, be these regulations or voluntary standards. A study by the WTO of the specific trade concerns raised by the member countries has shown that only 30% of these related to standards; 70% trade concerns related to what is called conformity assessment, which means issues related to inspection, testing and certification procedures. This is an aspect that we have ignored and to which we need to pay special attention to facilitate acceptance of Indian products abroad.

The most commonly used method for acceptance of inspection, testing or certification across borders is accreditation, be these regulations or voluntary standards. However, despite having internationally recognised accreditation bodies, the National Accreditation Board for Certification Bodies (NABCB) and the National Accreditation Board for Testing and Calibration Laboratories (NABL), we continue to rely on a little practised model of BIS conformity assessment without accreditation in our regulations, leading to non-acceptance of its certification even if international standards are used in regulations under the BIS Act. This works to the detriment of India’s interest as the industry has to, at times, secure additional certification in order to export, which increases the cost of compliance.

In fact, the entire system of using BIS as the hub of technical regulations under the BIS Act is an anachronism, practised as it is mostly in less developed countries where technical competence is limited and does not befit a country like India with considerable technical expertise and aspiring to match the developed economies. It is time to take a hard look at our approach to technical regulations and adopt international best practices.

Increasingly, it is being recognised worldwide that conformity assessment could be left to professional bodies in the private sector, except may be in high-risk sectors while the regulators exercise an oversight over the system and deal with essential regulatory functions like notifying regulations, licensing and market surveillance. Indian regulators are yet to embrace this concept in entirety, although some progressive regulators like the Food Safety and Standards Authority of India (FSSAI) in the food sector, the Central Drugs Standard Control Organisation (CDSCO) for medical devices, and the Bureau of Energy Efficiency for star rating scheme have taken commendable initiatives in this direction with reliance on accredited third-party conformity assessment, which should actually be a rule. They now need to leverage the international equivalences earned by our accreditation bodies to secure acceptance from overseas regulators to facilitate exports of relevant products.

The WTO TBT and SPS Agreements provide for acceptance of exporting country’s conformity assessment procedures by importing countries and India needs to pursue this option assiduously to promote acceptance of its products once we have fixed our regulatory regime. Bilateral trade agreements and better still multilateral trade agreements can go a long way in making exports easier, rather than making individual manufacturers struggle with overseas acceptance on their own. The free flow of goods in the EU and ASEAN markets are excellent examples, and in many regional groupings like the SAARC or the BIMSTEC, India is ideally paced to take the leadership to push such mutual agreements. It may be appropriate to point out that even harmonisation of standards is not a prerequisite for such agreements as long as we display a capability to manufacture and demonstrate compliance to standards/regulations of the importing countries. The seafood certification done by the EIC, as a duly designated competent authority for the EU, is an excellent example of one-sided understanding where India has gained access to the EU market.

The above narration reemphasises that the challenges in the standards and conformity assessment domain are quite complex, needing a highly professional, expertise-driven cohesive strategy.

The author is former CEO, National Accreditation Board for Certification Bodies (NABCB)
jauhrianil@gmail.com