New Standards for Indian OEMs

Sudha Nagaraj Bharadwaj, Journalist | 2/7/2013 | 19 comments

Sudha Nagaraj Bharadwaj
Alert! Manufacturers of electronic equipment and importers will have to adhere to fresh standards notified by the Indian government. Come April 1, 2013, all laptops, desktops, printers, tablets, televisions (LCD and LED), optical disc players, microwave ovens, printers, scanners, wireless keyboards, video monitors, telephone answering machines, amplifiers, musical systems, electronic clocks, and set-top boxes will have to obtain clearance from the Bureau of Indian Standards (BIS).

For the first time in history, electronic products, whether imported or manufactured domestically, cannot be sold in the country without BIS certification. Manufacturers of these products have to first register the products with the BIS and re-register every two years.

India has taken this strict measure to curb the grey market and ensure consumers are not saddled with sub-standard goods. The grey market accounts for nearly 40 percent of the sales in the Indian electronics market. Thus the certification is a step to safeguard consumer safety as well as regulate unfair practices including low pricing and unbranded, unreliable products.

The Department of Electronics and Information Technology (DeitY) has issued the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2012, under which manufacture, storage for sale, import, sale, or distribution of goods that do not conform to specified standards and that do not display the self-certification “Self declaration: Conforming to IS” after registration with the BIS is prohibited. The order does not apply to products meant for export.

CIOs of OEMs need to familiarize themselves with the new mandate and ensure compliance, for the government intends to announce an additional list of product categories soon, including mobile phones.

It is expected that the electronics market in India will grow at 22 percent annually, which is seven times the global rate. Telecom equipment and handsets, IT systems and hardware, consumer electronics, and industry electronics are the most promising segments on the horizon with the demand predicted to explode to $400 billion by 2020. At $28 billion, imports filled 65 percent of the demand in 2011.

Of particular importance are rules that stipulate that:

  1. Sub-standard or defective goods will be deformed and disposed of as scrap.
  2. Samples may have to be provided as and when called for by authorities to ensure compliance.
  3. Documents and other material can be inspected by authorities to ensure compliance.
  4. Authorities can enter premises, search, and seize goods if non-compliance is suspected.
  5. Series approval may be granted for goods of different sizes, ratings, and variety, based on sample testing or testing of representative models. Such samples of product or product series may be drawn from the manufacturing unit or the market -- and at random. The BIS may also draw samples in addition to this.
  6. The authorities may issue directions to manufacturers under the Bureau of Indian Standards Act and every manufacturer has to comply.
  7. Applications for registration with the BIS should be made by overseas manufacturers after setting up a liaison/branch office in India, and should enclose test reports, self-evaluation, and declaration.

As of now, the Standardization Testing and Quality Certification Directorate (STQC) under the Ministry of Information Technology has applied for approval to the BIS to conduct the tests. While the cost of testing is to be borne by manufacturers, the process will be sought to be made transparent by publicizing on a website.

There are provisions for suspension, renewal, cancellation, and lapse of registration as well as a procedure to appeal to the Central government against BIS orders. Naturally, the sweeping powers have caused eyebrows to raise and escalated worries over implementation. But the government has set its sights on the promising electronic system design and manufacturing sector(ESDM) and is unveiling a slew of policy initiatives, discussed by E2 India earlier.

OEMs looking to do business need to get familiar with the regulations, and just as important begin the process with the government. CIOs, as usual, will likely take the brunt of more compliance issues. However, the emphasis on excluding grey market goods may help manufacturers in the end.

View Comments: Newest First | Oldest First | Threaded View
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Gigi   New Standards for Indian OEMs   2/17/2013 10:36:51 PM
Re: Re : New Standards for Indian OEMs
"I feel now the Indian government is in track to protect their manufacturers. These kinds of guidelines are essential in the long run of a business."

Pubudu, it's not only to protect the Indian Manufactures; it's common for industry. I mean irrespective of domestic or MNC, the standards are uniform for everybody. So for the same product, standards are uniform across the industry and hence consumer rights are getting protected.
Gigi   New Standards for Indian OEMs   2/17/2013 10:32:54 PM
Re: New standards for Indian OEMs
Tekedge, during implementation, I think there may be lots of hurdles from industry and vendors. But the final intention is to protecting customer rights. Once the system is in place, there is no doubt that all will adhere to it and welcomes by whole heart.
Henrisha   New Standards for Indian OEMs   2/13/2013 11:00:32 AM
Re: Re : New Standards for Indian OEMs
I agree, Pubudu. This is a commendable effort by the government. Hopefully they can stick to the plan and implement it with conviction to ensure its success.
Henrisha   New Standards for Indian OEMs   2/13/2013 11:00:10 AM
Re: Re : New Standards for Indian OEMs
I agree. The government is central to reforming these efforts and implementing them. It would be difficult to achieve, more so in the beginning when many feel like they can get away without compliance. It's up to the authorities to find a way to implement the standards as they have been set.
Susan Nunziata   New Standards for Indian OEMs   2/12/2013 11:34:34 PM
Re: Enforcement?
@Sudha: Thanks, I look forward to your continued coverage on this topic. It's encouraging to know that there is staff and funding potentially available. 
Pubudu   New Standards for Indian OEMs   2/12/2013 9:55:52 PM
Re: Re : New Standards for Indian OEMs
Sudha, Thank you for sharing this article.

I feel now the Indian government is in track to protect their manufacturers. These kinds of guidelines are essential in the long run of a business.

If the government can monitor these things regularly and truly it will be a millstone decision that Indian government took.   
tekedge   New Standards for Indian OEMs   2/12/2013 7:13:42 PM
New standards for Indian OEMs
Gold standardisation could be implemented easily. But I hope that India is able to implement the new standards. Sometimes we are skeptical because corruption always sets it. But hoping for the best!
Anand   New Standards for Indian OEMs   2/12/2013 12:56:44 AM
Re : New Standards for Indian OEMs
OEMs looking to do business need to get familiar with the regulations, and just as important begin the process with the government.

@Sudha, thanks for the post. This is very good news, but its very important for the government to implement these guidelines strictly else it would be very difficult to curb the grey market in India.
Gigi   New Standards for Indian OEMs   2/10/2013 10:24:42 PM
BIS Certification
Sudha, I personally feel that it's a good effort from government side to ensure quality of product. Around 5 years back government introduced similar Hall marking for Gold ornaments and its success. Similarly the new BIS certification will ensure the quality of product and hence customer rights.
Umair Ahmed   New Standards for Indian OEMs   2/10/2013 7:21:00 PM
Re: Corruption, cost, grey market
Having everything channeled through the BIS and the authorities can open up another scam or corruption scandal, how is the transparency going to be maintained?

@ rdv: This is the very valid concern. The corruption and under the table deals may get common in the certification process like the case with drugs and pharmaceutical industry. If transparency is not maintained the whole and the great purpose of the project will lost and also due to less competition and to recover the cost spent on certification process, the price of products will increase.

And how unlikely it is that the manufacturer may bribe the BIS inspector to hold or unnecessarily delay the certification of rival product to keep its sales high? I have seen this happening in other industries where government approval is involved. Transparency is very critical for the success of this project.

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