|PROTECTING INDIAN INDUSTRY
FROM UNFAIR BARRIERS
The increasing number of trading regulations faced by the Indian industry are a matter of serious concern for the Government, admits Union Commerce Minister Anand Sharma, as he details the steps being taken to tackle the same, in a conversation with Renu Mittal.
Q:What are your first reactions as Commerce
A: Surely it’s different as compared to Foreign
Affairs and Information and Broadcasting.
However, purely from the commerce
angle, there is a significant and substantial
engagement with the rest of the world. There
are lots of international commitments that are integral
to my work here. And in that context, one has the benefit
of experience in the External Affairs Ministry and
familiarity with some of the subjects which had to be
brought to our attention. And these are subjects that are
presently very important when it comes to interaction
PROTECTING INDIAN INDUSTRY
FROM UNFAIR BARRIERS
4 Quality India July 2009
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5 Quality India July 2009
between governments. But here you have to go about
them in detail. From the industry side, you are talking
about your country’s development in different states,
different regions, what is the nature of support the government
can give in terms of incentives, how we can
|The Indian industry is facing a number of technical
barriers in exports, both TBT and SPS,
imposed through the regulatory regimes of
importing countries. What is India’s strategy to
deal with these barriers?
With the lowering of tariffs across the globe, Non Tariff
Measures (NTMs) are increasingly being used by
trading partners as regulatory measures to discipline the
flow of goods and services. Most members maintain
NTMs to address their legitimate concerns on human,
plant and animal health; adherence to standards
(including safety); environmental concerns; unfair
trade practices such as dumping, etc.
However, one cannot rule out some of these measures
being maintained purely for unfair protection of
their domestic industries and for impeding trade in
goods and services. A large number of these measures
are argued by proponents as permissible under the prevailing
WTO agreements and flexibilities provided
therein, thereby making it difficult to discipline them.
As health, safety and environmental concerns increase,
there is likelihood that NTMs, in the form of sanitary
and phyto-sanitary (SPS) and technical barriers to trade
(TBT), would be used by trading partners.
It is not surprising to see that most of the NTMs are
maintained by developed countries, especially on products
of export interest to developing countries. The
product categories where NTMs are proliferating are
food products, chemicals (including pharmaceuticals),
textiles and clothing, leather, engineering products, etc.
The problem of NTMs is especially compounded for
developing countries, such as India, that have a dearth
of data and specific information on the NTMs and their
impact on trade, domestic industry and consumers.
To address these problems, the following measures
have been taken:
- We participate in the process of international standard
setting, which is the basis of regulations/
NTMs. We also comment on draft regulations of
other countries so that our concerns are appropriately
- A database of SPS/TBT measures of other countries
has been built, so that the exporters have an
idea of the SPS/TBT measures that will impact our
exports to a country. If it is a justified measure, they
could prepare themselves for compliance and the
Government has schemes to strengthen this capacity.
If a measure is not justified, then an explanation
is sought from the importing country bilaterally, or
through forums such as WTO, SPS and TBT Committees.
If still not satisfied, there is the option of
raising a WTO dispute on the issue.
- The Department is also trying to have bilateral
deals with other countries on SPS-TBT issues as a
standalone measure or as part of the RTA/CEPA
negotiations, such as in Indo-Korea CEPA (Comprehensive
Economic Partnership Agreement).
This deals with aspects such as recognition of conformity
assessment procedures, accreditation, technical
are also trying
to unify our
trying to work
in the direction
- Based on the mandate from the Committee of Secretaries,
the Department of Commerce has constituted
an Inter-Ministerial Committee (IMC) which
would, among other things, also oversee issues
related to NTMs, such as monitoring of NTMs
imposed by other countries on India’s exports,
institutional capacity building to carry out conformity
assessment procedures and specific measures
to tackle NTMs.
India's position in negotiations on technical barriers
would remain weak if we do not upgrade our
domestic regulations to international standards.
Would you consider taking the initiative to push the
domestic regulators to review their regulations in a
It is true that domestic regulations would help us negotiate
technical barriers with other countries on equal
terms. The IMC referred to above has also been tasked
with recommending/suggesting standards, technical
regulations and conformity assessment procedures to
address legitimate domestic concerns, such as protection
of human, plant and animal health; safety; protection
of environment; unfair trading practices, etc. However,
our regulations have to keep in view the capacity
of the domestic industry to comply with them.
One of the common complaints in the industry is
that we accept foreign testing or certification quite
easily, while the other countries do not accept testing
or certification by Indian agencies. Has the Commerce
Ministry looked at this aspect to ensure that
acceptance of testing and certification is on mutual
This is being taken care in the FTA negotiations/other
bilateral trade agreements through mutual recognition
agreements on conformity assessment procedures,
equivalence agreements, and making use of accredited
bodies. In fact, through use of Supplier Declaration of
Conformity (SDOC) on our exports, we want to do
away with the need for third party testing and certification
for our exports completely.
are also trying
to unify our
trying to work
in the direction
||Internationally, the activities of conformity assessment
and accreditation are increasingly being performed
by professional bodies, while in India, and
even in the Commerce Ministry, a number of organisations
duplicate each other's work. How would
you ensure that multiplicity of agencies is eliminated
in the areas of regulation, accreditation and conformity
assessment among government agencies?
Conformity assessment work is not only handled by
Government labs and inspection/certification bodies
but also private bodies who seek accreditation from
accreditation bodies affiliated to international organisations,
such as ILAC/IAF. CA needs multiple bodies to
handle the volume of exports, as well as needs of
We are increasingly moving towards limited
accreditation bodies in the country — NABL under the
Ministry of Science & Technology and NABCB under the Quality Council of India. There are only a few other accreditation bodies, such as APEDA for organic produce. We are also trying to unify our regulatory work — FSSAI is now the single regulator for all foodrelated
laws. We are trying to work in the direction of
eliminating multiplicity of authorities.
Apart from regulatory barriers, India’s exports are
also suffering due to several voluntary and private
initiatives like Forest certification, Global Gap certification,
Fair Trade certification, Private Food Safety
standards, etc. How does the Commerce Ministry
propose to tackle this issue?
|Developed countries’ markets have seen a number of
private standards come up. These have become virtual
market access requirements in certain sectors, such as
food products. We are working in the direction of using
the SPS and TBT agreements to regulate the use of
such standards. We have already submitted a proposal
on these in the WTO.
Labour issues are currently not part of the WTO
agenda and we are not willing to draw any linkages
with trade. However, we have our domestic labour regulations,
including provisions to guard against the use
of child labour.
The European Commission has enacted a law on
accreditation and market surveillance to strengthen
regulation, since more and more private sector
resources are being used. It is aimed at bringing
transparency, objectivity and acceptability of products
and services at the global level. How does India
propose to respond to this development and initiate
similar mechanism in our country?
In the 11th Plan document, there is a proposal for regulation
of conformity assessment, which would cover
accreditation. The Industry side of the Ministry of
Commerce & Industry needs to take that up. Market
surveillance — as more and more conformity assessment
bodies, especially from private sector are used
in domestic regulation, the need for separating market
surveillance from them would be felt, which regulators
should handle independently — is needed to
sensitise regulators to take cognizance of this in their
What is your overall roadmap to enhance quality
across the board in India over the next five years?
Our Commodity Boards, such as APEDA, Tea Board,
Spices Board, Tobacco Board, etc. are working in the
direction of improving the quality of agriculture produce.
The industry is also taking voluntary steps in this
direction. We also help the Export Promotion Council
take up specific products for promoting exports, including
through quality promotion.
Further, export units having ISO 9000 (series)/ISO
14000 (series)/WHO GMP/HACCP/SEI CMM level-II
for exports of services and agro products are entitled for
double weightage on exports made for grant of Export
House status by DGFT.
One of the main complaints, not just in India but
across many other countries, is that Chinese products
are cheap but tacky, of poor quality. How will
you stop that happening with our products?
Where health and safety issues are concerned, we
will not hesitate to bring in a domestic technical regulation
that would automatically apply to imports.
Such regulation would also apply to Indian goods in
accordance with the National Treatment Principle.
Any need for regulation has to balance between the
needs of consumer health & safety, and the capacity
of the domestic industry to meet the requirements of
However, we need to find a way of fast-tracking
regulations — the DIT initiative for safety of electronics
and IT products is stuck for over three years now.
There is also need for looking at alternate ways of
checking compliance, rather than through the traditional
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