India Accelerates Import Approvals For Goods From China To Meet Festive Demand

India is set to expedite the approval process for importing various goods from China and other countries. This move comes as relations with Beijing improve and demand for consumer goods rises due to recent GST cuts. The government aims to issue mandatory certifications for plants in China and elsewhere to boost exports to India.

The Department for Promotion of Industry and Internal Trade (DPIIT) has requested manufacturers to provide details on delays in foreign manufacturers' certification schemes. This request extends to industry bodies and associations, indicating a broader effort to streamline the import process.

Boosting Supply Amid Festive Demand

A senior government official stated, "We will soon begin issuing and renewing licences for suppliers from several countries, including China." The Centre's focus is on helping industries meet the increased demand during the festive season, especially after price reductions led to stockouts of consumer goods.

Sales of items like automobiles and electronics surged after companies passed on tax benefits from September 22. Consequently, there are now waiting periods for premium electronics such as large-screen TVs and dishwashers, which could take weeks to resolve.

Quality Control and Certification

The Bureau of Indian Standards (BIS) requires approval for each manufacturing unit, whether domestic or international. This is essential for sourcing finished products, components, and raw materials under the Quality Control Order (QCO). BIS officials visit overseas facilities as part of this certification process.

While local factory approvals were swift, overseas approvals faced delays, particularly those in China. This disrupted supply chains within India. However, recent developments suggest a renewed engagement in trade talks between India and China.

Trade Relations with China

Beijing recently resumed exports of heavy rare earth magnets to India after a six-month pause. This has alleviated pressure on domestic manufacturers in sectors like electric vehicles and renewable energy. Additionally, Prime Minister Narendra Modi's August meeting with Chinese President Xi Jinping led to resumed direct flights and cleared Chinese business visas.

Despite these positive steps, Foreign Direct Investment (FDI) restrictions remain. Chinese companies still require government approval under Press Note 3 to invest in India. The Centre's slow pace on BIS approvals was partly due to its focus on promoting localisation and local value addition.

Localisation Efforts

The level of localisation varies across industries; air-conditioners rely 50% on imports. A large electronics company's CEO noted that while the government's localisation intent persists, it has softened its stance on overseas BIS approvals due to domestic input shortages affecting local production.

This decision reflects India's strategic approach towards balancing international trade relations while fostering domestic industry growth through localisation efforts.