Interviews
Exporters to face non-tariff barriers in EU countries - FICCI
01 Aug '09
6 min read
A majority of the respondents mentioned that EU is a very attractive market, owing to factors such as strategic location, wide consumer base, common visa regime. They also planned to expand trade with the EU in the next two years either by way of exploring new markets within the EU, setting up distribution centres, tie-up with existing market players to have a wider reach in the existing and new markets.
The EU is a strategic trade and Investment partner for India. Commercial interaction between the two nations has grown exponentially since 2000 - with current annual trade being 52 billion Euros approximately, growing by more than three times between 2000 and 2008.
But in spite the growing bilateral trade volume, industry is unanimous in its opinion that there still exists a discrepancy between what is projected as an open and uniform regime and what is experienced by Indian companies during their real life interaction with the EU.
The following are the major findings of the FICCI Survey:
• Lack of Information regarding Eastern Block European countries
• Language barriers still exist in various countries such as France and Spain where documentation is mandated to be in the local language
• Time consuming and elaborate bureaucratic procedures for obtaining work permits and lack of uniformity in rules across countries and states
• Companies with business in more than one EU constituent faces problems of easy movement of personnel between branches within Europe as separate work permits are required which affects efficient execution of projects. Inability to harvest economies of scale by producing in bulk. For instance, production for two EU constituents such as Germany and UK cannot be done in bulk in India, as standards vary between countries
• Rapid alert system of the EU to control the quality of food products is affecting the agri/marine sectors adversely
• EU comes out with new or revised notifications frequently - Industry does not get sufficient time to adapt and comply with changed requirements.
• Exports of many agricultural products such as groundnuts, fruits and processed foods such as egg products are currently taking place only on a bilateral basis as the standards and testing for health and environment concerns vary from country to country. Exporters, especially smaller players have raised the cost concern of having to get certificates from separate bodies-many of which are private- to be able to export. Agreement on Mutual Recognition of Good Manufacturing Practices (GMP) certificates will go a long way in alleviating some of the problems being encountered by the exporting community.
• The EU Directive on Traditional and Herbal Medicines, which covers approximately 1000 substances, has the effect of being an insurmountable NTB for market access of Ayurveda products to the EU market. Besides the quality dossier and the formal information to be provided in the application procedure, a tradition of at least 30 years (including at least 15 years within the EU) has to be proven together with the product's safety and efficacy.
• There is lack of clarity on the new REACH regulation (a European Union regulation concerning the Registration, Evaluation, Authorisation and restriction of Chemicals). Moreover, the new EU regulatory framework which mandates registration, testing and certification of chemicals above one ton is likely to be trade restrictive. Linkage to environmental standards, the process and production methods, the high cost for compliance and lack of technological and human resource capacity to comply may render the EU market inaccessible for export of chemicals from India to EU. Electronic and electrical equipment, automotive, aerospace, cosmetics, textiles, and paints are just a few examples of sectors that will be impacted by REACH.
Industry is generally optimistic about India and the EU signing the FTA. However, the FICCI Survey reveals that 60% of the respondents would like to have more information on the direct impact of FTA agreement on products they export/import and hence were not sure about proposed FTA.
Click here to view more:
The EU is a strategic trade and Investment partner for India. Commercial interaction between the two nations has grown exponentially since 2000 - with current annual trade being 52 billion Euros approximately, growing by more than three times between 2000 and 2008.
But in spite the growing bilateral trade volume, industry is unanimous in its opinion that there still exists a discrepancy between what is projected as an open and uniform regime and what is experienced by Indian companies during their real life interaction with the EU.
The following are the major findings of the FICCI Survey:
• Lack of Information regarding Eastern Block European countries
• Language barriers still exist in various countries such as France and Spain where documentation is mandated to be in the local language
• Time consuming and elaborate bureaucratic procedures for obtaining work permits and lack of uniformity in rules across countries and states
• Companies with business in more than one EU constituent faces problems of easy movement of personnel between branches within Europe as separate work permits are required which affects efficient execution of projects. Inability to harvest economies of scale by producing in bulk. For instance, production for two EU constituents such as Germany and UK cannot be done in bulk in India, as standards vary between countries
• Rapid alert system of the EU to control the quality of food products is affecting the agri/marine sectors adversely
• EU comes out with new or revised notifications frequently - Industry does not get sufficient time to adapt and comply with changed requirements.
• Exports of many agricultural products such as groundnuts, fruits and processed foods such as egg products are currently taking place only on a bilateral basis as the standards and testing for health and environment concerns vary from country to country. Exporters, especially smaller players have raised the cost concern of having to get certificates from separate bodies-many of which are private- to be able to export. Agreement on Mutual Recognition of Good Manufacturing Practices (GMP) certificates will go a long way in alleviating some of the problems being encountered by the exporting community.
• The EU Directive on Traditional and Herbal Medicines, which covers approximately 1000 substances, has the effect of being an insurmountable NTB for market access of Ayurveda products to the EU market. Besides the quality dossier and the formal information to be provided in the application procedure, a tradition of at least 30 years (including at least 15 years within the EU) has to be proven together with the product's safety and efficacy.
• There is lack of clarity on the new REACH regulation (a European Union regulation concerning the Registration, Evaluation, Authorisation and restriction of Chemicals). Moreover, the new EU regulatory framework which mandates registration, testing and certification of chemicals above one ton is likely to be trade restrictive. Linkage to environmental standards, the process and production methods, the high cost for compliance and lack of technological and human resource capacity to comply may render the EU market inaccessible for export of chemicals from India to EU. Electronic and electrical equipment, automotive, aerospace, cosmetics, textiles, and paints are just a few examples of sectors that will be impacted by REACH.
Industry is generally optimistic about India and the EU signing the FTA. However, the FICCI Survey reveals that 60% of the respondents would like to have more information on the direct impact of FTA agreement on products they export/import and hence were not sure about proposed FTA.
Click here to view more:
Federation of Indian Chambers of Commerce and Industry
Popular News
Leave your Comments
Editor’s Pick
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
