India needs a comprehensive law for formulating standards as they have “effectively replaced tariffs in the international trade discourse,” Commerce Secretary Rajeev Kher said here on Wednesday.
“Development of rules has gained greater importance than tariffs…. Indian industry may find itself shut out of some of these markets if it does not enhance its quality,’’ he said.
Speaking of the ‘enclavisation’ of international trade with the creation of U.S.-led trading blocs such as the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Regional Comprehensive Economic Partnership (RCEP), Mr. Kher said “the emphasis had moved away from tariffs, and these blocs would now be focused on creation of rules, regulations and standards and so India needs to find a place in this new architecture.”
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Mr. Kher was speaking at the “Standards conclave: role of standards in international trade: challenges opportunities and issues” that was jointly organised by the Commerce Ministry and the Confederation of Indian Industry (CII).
He further said that there was a need to mainstream the acceptance of standards even within the government and a consultative mechanism needed to be put in place to bring all stakeholders together while formulating standards. He gave the example of different countries in Africa that have upgraded their standards for various products to be at par with developed country standards. “Countries around the world are developing higher standards, and are designing products to meet these standards… the time has come for Indian industry to do the same,” Mr. Kher said.
Internationally, the role of standards had gained importance with the adoption of Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) agreements during the Uruguay Round of World Trade Organisation, Cabinet Secretary Ajit Seth said in his inaugural address.
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“India does not have a standard driven culture, and India’s manufacturing sector has been accustomed to developing in an environment where standards have been lax,” Mr. Seth said adding that appropriate legislation, therefore, needed to be put in place to provide an instrument to notify standards. This, he said, would help improve the competitiveness of Indian industry and improve its export prospects.
India needed to take greater advantage of the SPS and TBT agreements under the WTO, Bureau of Indian Standards Director-General Sunil Soni said. Of the total 18,000 notifications issued under these agreements from various countries, India had issued only 93 regulations. Even these few were the topic of intense debate, said Mr. Soni, which “points to the need to put in place a sound regulatory environment in the country.” CII MSME Council and Chairman Deep Kapuria called for compliance with standards to be made more affordable as the high cost of compliance could deter exports from Medium and small scale enterprises.