Another irritant threatens India-US business ties that have been on edge of late. India's proposed new standards for imported electronic gadgets such as tablets and mobiles have irked the US, which has termed them non-tariff barriers in a communication to the department of commerce, two government officials familiar with the matter told ET.

The standards could impact products such as Apple's iPads and iPhones. Imported electronic goods such as tablets, laptops, printers, scanners, set-top boxes, wireless keyboards, TV sets and microwave ovens have to comply with specified Bureau of Indian Standard certifications starting July 1. The deadline has been extended thrice by the government to give companies enough time for compliance.

"They have written," confirmed a department of commerce official. Another government official said US industry groupings and companies had also taken up the issue, apart from their government.

The US has said it sees these standards as non-tariff barriers designed to keep imports out to benefit the domestic industry. The department of telecom (DoT) is working on a separate set of rules to include cellphones within the definition of the word `telegraph' to ensure mobile operators only use handsets that have been tested at an accredited local laboratory.

Besides, the Directorate General of Foreign Trade has advocated mandatory disclosure of a mobile phone's specific absorption rate (SAR) value as a precondition for all future mobile handset imports into India.

DoT has engaged the Bureau of Indian Standards (BIS) to frame safety and product standards for mobile phones in coordination with Telecom Engineering Centre (TEC), DoT's technical arm. BIS will formulate product standards for mobiles that will focus on safety and performance. These norms, which could have implications for US telecom equipment manufacturers, are still in the formulation stage and may not meet the July 1 deadline.

The US industry sees these standards as non-tariff barriers that could impact exports to India.

The telecom industry is particularly peeved at the requirement of local testing. Recently, the Telecommunications Industry Association (TIA), a powerful US trade body representing manufacturers and suppliers of high-tech communications networks, had in a letter to the US International Trade Commission said "there is no evidence that location of an internationally accredited testing lab corresponds with the level of security assurance provided to it or the product itself ".

TIA had added that "there are long-standing, internationally accredited labs conducting such testing and location does not have a bearing on the accuracy of the test as long as the lab has achieved appropriate certification".

It also warned that India risked supply chain disruptions and increased costs for telecom service providers (TSPs) and their vendors as it currently lacked the requisite lab testing capacity. It said the July 1 local testing deadline should be deferred, failing which potential supply chain disruptions could hit consumer pricing.

India and US trade relations have been at their lowest after a row over the arrest of Indian diplomat Devyani Khobragade in December and more recently when the US Inter Trade Commission, a quasi-judicial federal American agency, began a review of New Delhi's trade and investments rules. It is investigating if India's intellectual property laws discriminated against US companies.

Attempt by the two countries to resolve long-pending tax disputes concerning transfer pricing have also not been able to make much headway despite India taking a very flexible position.

Globally, the debate on sanitary and phytosanitary standards has only deepened with most countries switching to developing their own standards to ensure upgradation of local manufacturing and preventing substandard imports.

India's move to introduce stringent standards for electronic goods has also been prompted by concerns over substandard goods finding their way into the Indian market.

Trade expert Biswajit Dhar agreed that most countries are using standards as non tariff barriers after tariffs came down, but added India was an outlier that has not yet got down to develop its own standards. "We need to develop product standards as all kinds of cheap and low-quality goods have started coming into the country. We need to get more aggressive on this but also get industry on board," said Dhar, director general of think tank Research and Information System for Developing Countries.

Speaking at a CII conference on standards on Wednesday, Rajeev Kher, commerce secretary, pointed out that standards had effectively replaced tariffs in the international trade discourse. He highlighted how different countries in Africa had upgraded their standards for various products and many of these were now on par with developed country standards.

Source:- economictimes.indiatimes.com