India Accelerates Import Approval Process for Goods from China to Meet Consumer Demand

India is accelerating the approval process for importing goods from China and other nations. This initiative aligns with improving relations with Beijing and increased demand for consumer goods following recent GST reductions. The government plans to issue mandatory certifications for manufacturing plants in China and other countries to enhance exports to India.

The Department for Promotion of Industry and Internal Trade (DPIIT) has asked manufacturers to report delays in foreign certification schemes. This request extends to industry bodies and associations, highlighting a broader effort to streamline the import process.

A senior government official mentioned, "We will soon begin issuing and renewing licences for suppliers from several countries, including China." The Centre aims to help industries meet increased demand during the festive season, especially after price cuts led to stockouts of consumer goods.

Sales of products like automobiles and electronics have surged as 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.

The Bureau of Indian Standards (BIS) mandates approval for each manufacturing unit, whether domestic or international. This is crucial 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.