India is the most difficult market for IT companies to import, sell: U.S.-based trade association

ANI | Updated: Oct 04, 2017 21:06 IST

New Delhi [India], October 4 (ANI): The Information Technology Industry Council (ITI), a Washington, D.C.-based trade association, has released a study finding that India tops the list as the most difficult market for information technology (IT) companies to import and sell their products when it comes to product safety regulations.

The ITI represents companies from the information and communications technology (ICT) industry. It works to influence policy issues aimed at encouraging innovation and promoting global competitiveness.

The report, IT Product Safety Regulations and their Impact on the Ease of Doing Business, assesses the regulatory practices of 44 governments and the European Union (EU) and their impact on the ease of doing business for IT companies in these markets.

The report names the EU as a top performer, with the United States ranked in the middle of the road.

The report scores countries based on criteria drawn from the World Trade Organisation's Agreement on Technical Barriers to Trade, which governs the process by which countries enact technical regulations relating to IT equipment and other products.

The study says:

- Within the group of countries that have product safety requirements for a broad range of IT equipment, the median score for ease of doing business was 22 out of a perfect score of 30

- India ranked last with a total score of 7 due to onerous requirements from its Compulsory Registration Order

- Based on its Low Voltage Directive regulatory model for product safety, the EU received one of the highest scores of 28.

- Most countries with broad requirements, including the United States, Canada, Mexico, Russia, South Korea, and China, were ranked between 20 and 24 out of 30, with Argentina at 17 and South Africa at 15

The report further mentions India as creating major obstacles to doing business in this rapidly growing market.

Giving it an overall score of 7, the study says that since its implementation in 2012, India's Compulsory Registration Order (CRO) has created major obstacles to doing business in this rapidly growing market.

"Among the IT companies surveyed for this report, all believe that the CRO has created a unique, overly burdensome and unnecessarily complex regulatory environment for product safety. The Indian safety standard referenced by the CRO is based on the internationally accepted equivalent standard to which IT products are already tested. Despite this, manufacturers must still submit products from each factory for testing and registration by government approved labs located in India, rather than accepting international test reports from respected labs located in other parts of the world," the report says.

"Limited capacity and technical expertise of the Indian labs have also led to bottlenecks and manufacturers have been forced to switch labs quickly following various lab suspensions. Without first addressing existing issues with the CRO, Indian authorities have instead expanded the scope of the requirements once and are currently looking to expand it a second time," it adds.

The report further says that India, unfortunately, has not taken a risk-based approach to regulating product safety, as evidenced by

the inclusion of professional products such as servers and storage equipment in the CRO.

"As a result, manufacturers are struggling to comply and they have repeatedly asked the Indian regulatory authority to align its conformity assessment requirements with international norms, to exempt or reduce the burden on low-risk products, and to focus on improving the safety of products that pose the greatest risk to the Indian public," the reports says.

"However, the Indian government has not made any such fundamental changes. Compounding the challenge, modifications to the CRO are often communicated via updates to an online list of frequently asked questions (FAQs), resulting in a lack of predictability. In addition, an insufficiently open and transparent decision-making process has contributed to confusion and disruptions in complex, global IT supply chains, impacting the ability of the tech industry to meet the needs of customers in India. As this report goes to press, authorities in India have been cancelling registrations for non-safety related reasons, affecting the import of hundreds of product lines," the reports concludes. (ANI)