12/01/2021 - Indian Economy

KEY POINTS

·        Regulations of importing countries on grounds such as health, safety, environment, deceptive trade practices and national security enshrined in the WTO’s Agreement on Technical Barriers to Trade (TBT Agreement).

·        The Agreement on Sanitary and Phytosanitary measures (SPS Agreement) that governs agri-food trade so important to India, encourage, not oblige, member nations to adopt international standards in their regulations.

·        Any individual manufacturer, therefore, can approach the foreign regulator, fulfil its requirements, and get its product accepted. The pharmaceutical sector is a good example to cite of Indian industry’s success in using this approach.

·        The challenge here would be the access to right information (imagine regulations in Japanese or Chinese languages), the capability to understand and meet the requirements laid down (for example, testing capability).

·        Therefore, imports and even domestic manufacturers have a free run in the Indian market, both to the detriment of users and consumers, as well as a quality conscious industry.

·        Even if we upgrade our regulations to international standards, with the provision for stricter standards allowed in the WTO regime, an issue would remain if importing countries adopt stricter standards which may not be appropriate for India.

·        India needs to fix its domestic regulatory regime and the philosophy that it can have differential standards for domestic market and exports should be buried.

·        This calls for an integrated and cohesive approach, failing which India would not only struggle in the overseas markets.

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