Low-grade imports: DPIIT mulls quality control curbs for 45 more products

By: |
August 31, 2021 2:30 AM

The move is part of the ministry’s drive to formulate standards/technical regulations or put in place QCOs for 371 key products in the first phase. Imports of these products were to the tune of $128 billion, or a fourth of the total purchases from overseas, in FY19, well before the pandemic struck.

Although Sri Lanka and Afghanistan are still small markets for India, expeditious resolution of any trade issues with these countries will help those, especially small businesses, that are supplying to these nations.Although Sri Lanka and Afghanistan are still small markets for India, expeditious resolution of any trade issues with these countries will help those, especially small businesses, that are supplying to these nations.

The commerce and industry ministry is considering quality control orders (QCOs) for 45 more products, ranging from electronics to industrial machinery, as it intends to harden a crackdown on imports of sub-standard products.
The move is part of the ministry’s drive to formulate standards/technical regulations or put in place QCOs for 371 key products in the first phase. Imports of these products were to the tune of $128 billion, or a fourth of the total purchases from overseas, in FY19, well before the pandemic struck.

“Of the 371 products identified by the commerce ministry, 71 have been allocated to the department for the promotion of industry and internal trade (DPIIT) for the issuance of QCOs. Of these, the DPIIT has notified QCOs for 26 items and the remaining 45 are under consideration,” an official source told FE.

However, keeping with the principle of free and fair trade and to ensure domestic consumers have access to quality products, both Indian manufacturers and foreign suppliers will have to conform to the same standard specifications.
Importantly, concerned about protectionism by stealth adopted by some nations, commerce and industry minister Piyush Goyal last week asked industry associations to flag non-tariff barriers faced by Indian exporters in various countries so that New Delhi can firm up appropriate responses wherever feasible. Industry sources say the responses could be in the form of subjecting imports to strict quality parameters.

So far, QCOs have been issued for a total of 100 products under the BIS Act, the source said. These include air conditioner, toys, footwears, pressure cooker and microwave. Separately, the QCOs for another 15 products, including gas cylinders, valves and regulators, have been notified under the Indian Explosives Act. The QCOs issued by the government are in sync with the WTO Agreement on Technical Barriers to Trade, said the source.
Apart from the QCOs, the government has already firmed up standards as well as technical regulations for hundreds of products across sectors, including consumer electronics, steel, heavy machinery, telecom goods, chemicals, pharmaceuticals, paper, rubber articles, glass, industrial machinery, some metal products, furniture, fertiliser, food and textiles.

Though the move isn’t Beijing-specific, it could hurt China, as the second-largest economy is the biggest supplier of low-grade products to India. Government officials maintain that the idea behind the move to enforce standards is not just to curtail low-grade imports but to improve the domestic output of quality products as well. This will, in turn, help boost exports and substitute low-grade imports, in sync with Prime Minister Narendra Modi’s push for Atmanirbhar Bharat.

Interestingly, India’s move to develop technical specifications for products in recent years marks a shift in its approach to curb the inflows of substandard products (Its earlier approach was to raise tariffs).

Analysts have said India seems to have taken a cue from major developed and developing nations that have effectively employed various non-tariff measures to target non-essential and substandard imports. For instance, the US put in place as many as 8,453 non-tariff measures, followed by the EU (3,119), China (2,971), South Korea (1,929) and Japan (1,881), according to a commerce ministry analysis last year. In contrast, India has imposed only 504 of them.

Of course, non-tariff measures are not always aimed at curbing imports (for instance, safety, quality and environmental standards are put in place by all countries for imported products). But what have often worried analysts is that they can be abused for trade protectionism.

Since substandard products are usually imported at much cheaper rates, they not just pose risks to consumer health and environment but also hit domestic manufacturing because of the price-competitiveness. Many countries, especially the big economies, therefore, subject their imports to rigorous technical standards and sanitary and phytosanitary measures.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Trying to ease rules to make it easier for units to exit SEZs: Goyal
2Indian economy has bottomed out; formal sector may get back to pre-Covid level by this year-end: Montek Singh Ahluwalia
3Govt undertaking second generation of reforms; economy moving towards double-digit growth: BJP