Regulatory Reforms (Product Regulations) in India: Is there a need to reinvent the wheel?
Regulatory reform (product regulations and standards) makes sure that rules, standards, regulations, etc, remain fully responsive to changes in conditions surrounding them. Regulatory reforms can take many forms, usually directed to streamlining and improving the efficiency of regulations. In some cases, regulatory reform can mean increased rather than decreased levels of regulation or government surveillance.
India’s competitiveness in manufacturing and the success of ‘Make in India’ depends on its ability to produce high-quality products and services. Product quality is important for human health and consumer safety, as well as for protecting the climate and the environment. One way of ensuring that products and services meet certain standards is through technical regulations with mandatory compliance. However, technical regulations also have the potential to impede the cross-border flow of goods and services if they become barriers to trade.
With the emergence of new FTAs, there is comparatively less focus, than earlier, on tariff-tariff negotiations. With majority of tariffs will go away in future, a huge focus is on technical regulations, standards and conformity assessment procedures which will drive future trade. Prime Minister Modi during the start of his second tenure mentioned that if India has to compete in the international markets, then it has to build more and more product regulations. Since then, all ministries and departments have been working on developing product standards, regulations, etc.
Data shows that India has issued 163 mandatory product standards and Quality Control Orders (QCOs) since 2019. However, analysis of these shows that regulatory agencies in India are developing these standards on their own rather than aligning with the existing international standards that the majority of countries are already meeting. There is no harm in developing own standards, technical regulations, etc.; however, in order to compete in the international market and better alignment with other countries’ regulations it is better to align with the existing norms rather reinventing the wheel per se. It will create an undue delay in developing these standards and then adopting them after issuing at the World Trade Organisation (WTO) for comments.
Indian regulatory agencies like Bureau of Indian Standards (BIS), Food Safety Standards Authority of India (FSSAI), etc, may engage with regulatory agencies in export markets, irrespective of existing FTAs. This can be done through mutual cooperation agreements, mutual recognition agreements, etc where both parties can develop or align on product standards. This will give a boost to the regulatory reform process and exporters can easily know the exporting country’s requirements while making their products. This will also strengthen the domestic industry and give consumers quality products and minimize the economic and health impact of illicit, counterfeit and spurious products.
Deepak Sahoo, Senior Regulatory Director, VeKommunicate