By Arora, S. C.; Sierra, Enrique
International Trade Forum , No. 4
If a supplier loses export
business, because of nonconformance to the buyer's quality requirements, this affects not only that company's future export prospects in the foreign market but also the image of the exporting country. One way to avoid this situation is to adopt effective export quality control measures at the national level that minimize the possibility of nonconformance. Many developing countries have taken such steps to help stimulate the growth of their export trade. One of these is India, which enacted a comprehensive law in 1963 to ensure an appropriate level of quality for exports. Since then India has developed infrastructure to provide third-party certification for selected export products, with successful results. The extent of the system that has been put into place is illustrated by the fact that in 1988-89, for example, nearly 185,000 consignments of Indian goods were certified for export. It is estimated that about 40% of India's total exports (by value) are subject to pre-shipment inspection under the system.
In the early 'sixties considerable stress was being laid in India on increasing exports of both traditional and new products. As a means to promote this export expansion, the Government appointed a committee to review, among various subjects, the existing schemes, rules, regulations and legislation relating to compulsory and voluntary quality control and pre-shipment inspection of export products and their packaging and to suggest action to ensure appropriate quality of export goods. Among other measures, the Committee advised that a central scheme for quality control and pre-shipment inspection be created, which could coordinate the arrangements currently in operation and be extended to cover additional products as necessary. It also suggested introducing various administrative and legislative measures to improve the quality of exports. Based on the Committee's recommendations, the Indian Parliament passed comprehensive legislation entitled Export (Quality Control and Inspection) Act in 1963. That Act is the principal legislation in India giving powers to the Government to frame policies and programmes for effective export quality control.
The export inspection system set up under this legislation operates through an organizational structure comprising the Ministry of Commerce (the regulatory body), the Export Inspection Council (an advisory body) and the Export Inspection Agencies (the implementation agencies), as explained below.
Ministry of Commerce: The Ministry of Commerce carries out the following main functions upon the advice of the Export Inspection Council:
* Frames policies and issues orders, rules and regulations concerning the quality control of export products.
* Recognizes inspection agencies, samplers, surveyors and testing houses.
* Constitutes appeals panels concerning decisions of the Export Inspection Agencies.
* Provides financial grants to the Export Inspection Council and these agencies.
More specifically, the Ministry decides which products should be subject to quality control and/or inspection and prescribes the inspection methods and standard specification(s) to be applied to them. It also has authority to prohibit the export of certain products, after consulting the Export Inspection Council. Furthermore it can recognize or establish "marks" to show conformity of products with standard specifications.
Export Inspection Council: The Export Inspection Council (EIC), consisting of 20 members, is constituted by the Ministry and acts as advisory body to it. Standardization and quality control experts, government officials, export promotion councils, private inspection agencies and trade associations, among other bodies, are represented on the EIC. Its principal functions are to:
* Advise the Ministry on measures to be taken to enforce quality control and the inspection of exports, and draw up programmes for this purpose. …