Meeting Regulatory Challenges for Accessing Global Markets

Coverage from Association of Indian Organic Industry

Indian products, especially in agri-food sector, typically face stringent regulations of the importing countries, especially developed economies, in their quest for access to global markets.

Depending on the sub sector within agri-food sector, the challenges can vary and even India’s strategy for overcoming such challenges has to vary.
Any regulation usually has two components – one, the standards to be implemented by the agri-food operators – these could be product standards and/or process standards – like HACCP in high risk sectors in food or organic production and two, the manner of demonstrating compliance to these standards – be it self declaration of conformity in low risk products which European Commission (EC) uses quite extensively for industrial products or direct evaluation by the overseas regulator as USFDA does for pharma industry or the use of third party agencies as EC and US Department of Agriculture adopt in case of organic production.

All countries, who have prescribed regulations for any product, also specify the procedure for demonstrating compliance to these regulations. Any individual producer, therefore, can approach the overseas regulator,
fulfil its prescribed requirements and get its products accepted. Pharma sector is a good example to cite of Indian industry’s success using this approach. Therefore, any agri-food producer is free to follow the prescribed route to compliance and seek approval of the overseas regulator on his own. This, in a way, means each producer fends for himself.

The challenge here would be access to right information (imagine regulations in Japanese or Chinese languages), capability to understand and meet the requirements laid down (including testing capability which has often been a constraint) and the cost that may be incurred in the entire exercise which can be prohibitive – the fee in USD or Euros or expenses of auditors flying in from USA or Europe can push up prices of commodities and even make them uncompetitive or prevent smaller operators from even trying to access such markets.

Therefore its necessary to think of ways to make the access easier for our industry.

One of the ways is to pitch our regulations on par with international standards so that our products become more easily acceptable and we can aim for acceptance of our regulated products. Agri-food sector is governed by the SPS Agreement and the international standards setting bodies have been listed in it for human, animal and plant health as Codex, OIE and IPPC, respectively.

This itself is a challenge in India given the fact we have scores of tiny and small operators producers who may find it difficult to implement international standards. Implementing HACCP for food safety is one such example; implementing WHO GMP in pharma or AYUSH another.

Sometimes India does not even have regulations while importing countries have as was faced in organic production for years till FSSAI came up with domestic regulations.

Even if we upgrade our regulations to international standards, with the provision for stricter standards allowed in WTO regime, an issue would remain if importing countries adopt stricter standards which may not be appropriate for India and, therefore, may not be needed to be adopted in our regulations.

All the above situations would call for an institutional mechanism to test and certify our products to stricter regulations in the global market which, for example, is available through the Export Inspection Council (EIC) for
seafood or APEDA for organic production or the Quality Council of India (QCI) in the form of AYUSH Premium Mark or ICMED schemes based on international standards like WHO GMP or ISO 13485 for medical devices respectively. The last named has an advantage that its schemes can be operated both for the domestic and overseas markets while the first two are
mandated only to deal with exports but have the advantage of
being able regulate exports, if needed.

Such an institutional mechanism, whether by regulation by EIC or APEDA or voluntary like by QCI can then be presented to overseas regulators for acceptance by the government.

Indeed, India has been successful in securing acceptance of EIC’s seafood certification system by EC and some other countries as also organic certification of APEDA, again by EC and some other countries

The WTO TBT and SPS Agreements provide for acceptance of exporting country’s conformity assessment procedures or even regulations by importing countries and India needs to pursue this option assiduously to promote acceptance of its products. Ideally, if our regulations are entirely based on international standards, we could negotiate for acceptance of our products as regulated.

However, in many cases as highlighted above, our regulations are less stringent or different from those of the importing countries and, therefore, the option of having a voluntary or even regulatory system for certifying to
importing countries’ regulations is a viable option. It would also be appropriate to underscore the importance of conformity assessment meaning inspection, testing and/or certification procedures in meeting overseas regulations.

A study by the WTO of the specific trade concerns raised by the member countries has shown that only 30% of them related to standards; 70% trade concerns related to conformity assessment. This study did not cover agri-food sector but is a good pointer.

The most commonly used method for acceptance of inspection, testing or certification across borders is accreditation be it regulations or voluntary standards. Fortunately, India has internationally recognized accreditation bodies, the National Accreditation Board for Certification Bodies (NABCB) and the National Accreditation Board for Testing and Calibration Laboratories (NABL), which should be leveraged to promote acceptance of India’s conformity assessment. Some progressive regulators like Food Safety and Standards Authority of India (FSSAI) in food sector, CDSCO for medical devices and the Bureau of Energy Efficiency for star rating scheme have embraced this system of accreditation and third-party agencies which many regulators around the world also utilize.

It may be appropriate to point out that harmonization of standards is not a prerequisite for such agreements as long as we display a capability to produce and demonstrate compliance to the standards/regulations
of the importing countries. EIC, as a duly designated competent authority for EU in seafood, is an excellent example of one sided understanding where India has gained access to EU market.

The acceptance of our certification system can be either through bilateral trade agreements with our trading partners or better still through multilateral trade agreements and can go a long way in making
exports easier rather than making individual operators struggle with overseas acceptance on their own.

The free flow of goods in EU and ASEAN markets are excellent examples and in many regional groupings like SAARC or BIMSTEC, India is ideally paced to take the leadership to push such mutual recognition agreements. Multilateral agreements obviously would be better since they provide access to a number of countries at the same time. Multilateral agreements
obviously would be better since they provide access to a number of countries at the same time.

The above narration highlights that India needs to carefully consider various options suited to each sub sector within agri-food sector to create internationally acceptable systems to promote exports.

Source of the article : https://aioi.org.in/newsletters/

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