India is looking to impose restrictions and standards on products where imports have replaced domestic production, an attempt to give a push to ‘Make in India’ programme and reduce the widening trade gap.
The commerce department has instructed various ministries to analyse data and compile lists of products which are being produced domestically but losing market share to imports.
The Bureau of Indian Standards (BIS) has been assigned the task of setting standards that will have to be met by imported goods as well as goods manufactured in the country. “We need to do an analysis of the deficit before putting any technical restrictions because there are certain areas where we do not have domestic production,” said an official aware of the development.
Medical devices, solar cells, ceramics, plastic wares and toys, among other products, may be subjected to mandatory standards in the future as the government attempts to control India’s large trade deficit.
Most line ministries, especially those which have a regulatory role such as textiles and health, along with the industry department, have been asked to prepare a list. The government wants to impose standards, compliance with which will be mandatory for both domestic and imported goods – called ‘national treatment’ in trade parlance.
The national treatment will ensure that the restrictions are consistent with the World Trade Organization commitments.
At present, about 120 products including certain qualities of cement, electronics, milk powder, cables and wires come under mandatory standards compliance. India exported goods worth $274.6 billion in 2016-17, 4.7 per cent higher than $262.2 billion in the previous year. The trade deficit in 2016-17 was $105.7 billion.
“We have asked all ministries to look at data and find products that need attention. We will take two months for a review,” the official said.
Moreover, the department wants experts from all government agencies to participate in meetings of various global standard setting fora. So far, BIS has usually represented India at such meetings.
Besides keeping the trade deficit in check, the move will help make the domestic industry more competitive since it will also have to comply with the same norms.
“Consumers will benefit only if the domestic industry adopts those standards. The success of this exercise will depend on what standards are set and how much time companies take to abide by them,” said an industry expert.