Indian Industry needs to develop norms for standard products: Ajit Seth

New Delhi: 'Indian industry needs to develop norms for standard products, like those in advanced nations, to compete globally and help to lower transaction costs for traders', said Ajit Seth, Cabinet Secretary. "It is essential that the Indian industry inculcates a culture driven by standards. In many countries, product standards are developed through a voluntary consensus of companies engaged in producing competing products," added Ajit Seth at a conclave on the role of standards in international trade organised by the CII and the commerce ministry.

Indian industry, therefore, has a crucial role to play in the development of standards, he said. Seth said the lack of proper standards in India hurts domestic sales and adds to transaction costs for exporters.

"Despite the crucial role that standards play in facilitating transactions, India does not have a standards-driven culture. This has implications for both domestic and international sales. "It is not surprising that Indian exporters have to incur high costs in order to comply with standards and technical regulations in main foreign markets," added Seth. He said technical regulations and standards now occupy significant space in the changing scenario of international trade as globally tariffs are going down.

"The purpose of standards is to facilitate information exchange, ensure quality and achieve efficient provision of public goods," he added. Seth called for a coordination mechanism to implement a road map on product standards in a time-bound manner.

Currently, several government departments and other stakeholders are involved in setting and implementing standards. "If we are unable to act with clarity and speed, we run the risk of not only exposing our consumers to inferior goods but also slowly getting excluded from main export markets," Seth added. He said India does not have a proper legislative instrument to notify and administer technical regulations. "Ideally, the government needs an instrument which gives it flexibility to identify areas that need to be regulated at the national level in the interests of health, safety, environment, national security and deceptive market practices," said Seth. Awareness among traders is also very poor, he said, adding that exporters often do not realise whether the barriers they face are genuine or can be contested.

"There is an urgent need to ensure that industry takes a more important role in identifying new measures that impede market access as also understand new regulations that need to be adhered to help increase exports from India," concluded Seth.