Standard compliance making exports to EU difficult

New Delhi, Mar 19: Indian exporters to the EU are finding it increasingly difficult to comply with European Union's (EU) product and process standards, according to a survey carried out by FICCI.

The survey reveals that in some cases the cost of complying with the EU standards could be as high as 65 per cent of the production cost of the good.

Exporters of a wide variety of products like grapes, chillies, machinery, textiles, garments, switch-gears, refrigerators, mango, papaya, pineapple and chemicals say that high cost of certificates for complying with EU standards and lack of availability of certifying agencies in the country to issue such certificates is making it difficult for them to export to the EU.

In its recommendations to the Ministry of Commerce and Industry, FICCI has requested the Government to take it up with EU authorities in the India-EU High Level Trade Group set up recently.

According to the survey, exports for agricultural items, especially fruits, Indian exporter needs to have a number of certificates like EurepGap Certificate, British Retailers Consortium (BRC) Certificate, Fumigation Certificate, Codex, HACCP Certification, Kosher Certification, ISO 9001 Certification, and Natur's Choice Certification.

Enumerating the cost involved, FICCI said the cost of EurepGap Certificate comes to Rs 1 lakh per farmer, the cost of BRC Certificate is Euro 4,500 and the cost of Kosher Certificate is Euro 3,500.

Besides this, testing analysis cost for Maximum Residue Level (MRL) for pesticides is close to Euro 200 per parameter. As it is evident, all these costs are high not only for small exporters but even for the large size exporters.

In addition to the high cost of complying with standards, Indian exporters of agricultural products are finding it difficult to export to the EU because of EU's categorisation of India as GBR-I country, delay in approval by EU agencies for Indian processing units of egg and milk products and frequent changes in MRL levels by EU.

FICCI said that EU's categorisation of India as a GBR-II country that is BSE is unlikely but not excluded that domestic cattle are infected with BSE agent) is hampering exports of animal products to EU. The delay in redetermining the status of India as GBR-I (no risk of BSE) country by the EU is affecting the country's exports, the (FICCI) survey pointed out.

Also, India's proposal for approval of domestic egg processing units is still pending with the EU authorities since 1997 for various reasons. Similarly, the EU authorities have not permitted exports from approved domestic milk units since 2001.

It was also pointed out by the survey that EC revises upward the MRL standards frequently and also implement them immediately without giving proper time to exporters to readjust.

In case of textiles and clothing, which is one of the largest exporting item to the EU, all EU buyers insist on factory compliance audit certificate related to child labour, work environment, welfare and HR practices, the survey pointed out.

The buyers also insist on ISO 9001 Certificate and 'CE Marking' Certification. The CE Certification is an expensive and time consuming process and the cost involved is Euro 2,000 to Euro 5,000 per certificate.

Moreover, getting CE Certification within the country is not possible for certain class of products or tests, and also not all qualified testing agencies in India are authorised to issue 'CE Marking' compliance certificate.

The survey also pointed out that to comply with some EU standards, Indian exporters will have to make fresh investment to the tune of 2 million dollars to change their process of production.

In case of refrigerators, to comply with EU standards of refrigerant and foaming agent, the survey pointed out that it will require an investment of 2 million dollars by an Indian exporter, only to manufacture products according to the EU standards.

Similarly, to comply with the EU standards for alcohols, Indian exporter needs to make an additional investment of Rs 10 crore. This investment would be required to comply with the EU's standard of raw material used for alcohol and also to comply with bottling capacity norms, according to the FICCI survey.

UNI

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