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India must realise its export potential.

Date: 24-11-2020
Subject: India must realise its export potential
The country must work on meeting global standards for exports, policy stability and matching global tastes.

For increasing exports, India needs to focus on multiple areas. These include aligning with global standards/global quality, stability and dependability of our policies towards exports, appropriate linkage to technology, among others.

Aligning with global standards: The government had set up the Quality Council of India (QCI) in 1997, wherein the Indian Industry is represented by three premier associations—ASSOCHAM, CII and FICCI. The nodal body for the same is the Department for Promotion of Industry and Internal Trade (DPIIT). The objectives of the QCI include capturing in detail every aspect of quality standards, accreditation rules and activities, for improving quality of life and wellbeing of citizens of India, and develop accreditation standards to support accreditation programmes; the European standards are taken as a measure to aspire for. The website of the DPIIT also mentions GLP (good laboratory practices), and the National GLP Compliance Monitoring Authority (NGCMA) has been established by the Department of Science & Technology (DST). The DST has entered into a memorandum of understanding (MoU) with the QCI for effective implementation of the GLP certification programme. Here it must also be mentioned that the Organisation for Economic Co-operation and Development (OECD) has laid down principles of GLP and its certified test facilities. On March 3, 2011, India became a full member of the Mutual Acceptance of Data (MAD) in the OECD’s working group on GLP. Because of this, non-clinical health and safety studies/data of such studies generated by Indian GLP laboratories is acceptable in 36 OECD member countries and six non-member MAD adherence countries.

This facilitates export of chemicals, drugs, pesticides, etc, to these countries, including the developed markets of the US, the UK, Australia, Japan, and the EU. The NGCMA functions as an apex body represented by secretaries of stakeholder ministries, with the secretary of the DST as the chairman. The NGCMA also functions as per OECD principles of GLP, and is supported by technical committee on GLP. According to the DST, there are 17 trained GLP inspectors from various government laboratories, universities and institutions who evaluate technical competence of an applicant’s test facility and adherence to the OECD principles of GLP.

However, GLP compliance certification in India is voluntary in nature. This implies that it’s not compulsory for an exporter to seek this certificate before exporting. This, in a way, explains the poor competitiveness of Indian exports as the law of the land allows exporters to export even if they are not GLP-certified.

Stability and dependability of our policies towards exports and FDI-related policies independent of political leadership: Importing countries expect dependability and stability in India’s export commitments and FDI policies. For instance, India’s exports—particularly of items such as onions and sugar—have been erratic through the years, subject to domestic shortages dictated by vagaries of weather. This pattern has continued for years and, as a result, India has not been able to meet the twin objectives of catering to domestic demand as well as keeping its international commitments (the country has not been able to properly utilise, and grow, its warehouse facilities and cold storages).

Low adaptive efficiency of our manufacturing exporters to fast-changing global dynamics, tastes and needs: What this implies is that if there is a sudden spurt in demand of any particular commodity in the international market, our manufactured goods exporters are not always able to quickly seize the opportunity to maybe increase production in a limited time and export the same to the destination country. In contrast, China is capable of seizing such opportunities quickly and export the product in a limited timeframe.

Appropriate linkages to technology: This is specifically in the context of agricultural and food processing industry, and even Ayurveda and wellness-linked food items, where India has a comparative advantage. This area has not been adequately explored by India to allow high-value exports and thus higher earnings for our farmers.

The recent article ‘Connecting farms to folk: Linking agri-tech to FPOs can create value’ (bit.ly/35SXmFx) by T Nanda Kumar elaborates upon the issue of linking agriculture-technology to farmer producer organisations to create value. This idea can be extended to increasing earnings of farmers through exports and the use of technology.

Access to market using digital technologies has brought a great many changes in the way food markets operate. Also, food markets are witnessing interesting changes within India and globally where tastes are shifting from high-sugar and salt and processed foods to wellness safe foods. This is an opportunity for Indian farmers to capture high-value export markets. The best way would be to start post-harvest aggregation for FPOs through agri-tech start-ups. Also, the government can facilitate by connecting them with input companies and helping them with tailor-made solutions.

This would, of course, require careful understanding of different layers of domestic market and linking the same to exports. The ministries of commerce & industry, food processing and agriculture can join hands to explore the possibility of increasing farmers’ income through high-value exports. Since the process will need to be digitally-encrypted end-to-end, it will ultimately eliminate leakages through middle men and generate higher earnings for farmers through exports.


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