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Government officials said on Wednesday India would tighten quality controls for consumer and capital goods. The move follows calls to curb cheap imports from China amid diplomatic tensions between Delhi and Beijing after the recently defused Doklam stand-off.
The new rules target toys, electronic goods, machinery, food processing, construction and chemicals, sectors dominated by China, and come amid greater scrutiny of mainland firms looking to enter India’s multi-billion dollar power transmission and telecom business.
For India’s toy retailers, who import everything from toy cars to musical phones and even robots from China, the new requirements have meant supply disruptions just ahead of Diwali. The new testing requirements for toys focus on their chemical content and flammability and demand more stringent testing for those that are electrically operated. China accounts for 85 per cent of India’s $760 million toy industry.
“It comes out of the blue, with no forewarning and gives no time for retailers to prepare for compliance,” said Kumar Rajagopalan, CEO, Retailers Association of India. “It will have grave consequences, such as losses in terms of huge amounts of money paid as advance by retailers to suppliers overseas and a loss of jobs as some businesses that sell only toys will have to shut shop,” he said.
The Bureau of Indian Standards (BIS) has 23,000 standards across industries, many of which are never fully enforced. Now, departments have been asked to carry out laboratory tests and spot inspection to ensure goods conform to the regulations.
“We have started this work on a war footing, and have quality control orders for almost every product that we are consuming in the country,” said Ramesh Abhishek who heads the Department of Industrial Policy and Promotion. The new rules apply to both foreign manufacturers and domestic firms.
However, two sources said the sectors targeted were the ones in which China controlled more than two-thirds of the market, and where there had been “chronic” complaints of substandard products. While the new rules could hurt local retail consumption, other industry participants argued they would ultimately help local firms by improving standards and keeping low-end imports in check.
Separately, Indian Steel secretary Aruna Sharma said her department would soon release new guidelines, raising quality norms for welded stainless steel pipes, which are used in oil and gas as well as in the construction sector. “There is evidence of China exporting semi-finished and finished goods using stainless steel that do not meet the BIS standards,” Sharma said.
Bilateral trade between India and China boomed to $71.45 billion in 2016-17 from $1.83 billion in 1999-2000, though most of this is skewed to Chinese exports. The trade deficit has widened to $51.1 billion over the past year, a nine-fold increase over the last decade, despite repeated Indian calls for China to address the imbalance and open its markets.
Those trade differences are now being amplified by the resurfacing of a long-running border dispute, which has stirred protectionist sentiment in India. The Swadeshi Jagran Manch, an affiliate of the RSS, has planned a protest rally in Delhi later this month against the influx of Chinese products.
In August, the government had ordered makers of light-emitting diode (LED) bulbs to register their products with the BIS for safety checks in an industry where smuggling of Chinese products is rampant.