A. INTRODUCTION

The government has subjected imports of 68 specified goods to mandatory compliance of Indian Quality Standards. The DGFT has notified Indian Quality Standards through its notification (RE-44) dated 24-11-2000. These goods are to compulsory compliance of BIS Standards. The list of the 68 items is in <BIS_STANDARDS_LIST>.

The foreign manufacturers or exporters are required to register with Bureau of Indian Standards (BIS) to comply with this requirement of the DGFT notification. (The Indian importer cannot be registered under BIS. However, it is possible to get exemption from BIS registration in specific cases. The decision on this rests with the BIS). Once the registration is obtained, the system operates on self certification basis whereby the manufacturer is permitted to apply the Standard Mark on the product after ascertaining its conformity to the licence <BIS_LIC>

Products like Gas Cylinders and Valves (See Sl.No.51 to 62 of Notification RE 44) are under special certification schemes, for example, lot or batch inspection.

The first 9 items in the list are in the category of food ingredients like Milk powder for infants and the like comprise of the second category of five items. Cement varieties consisting of 13 items fall in the third category. Three types of steel tubes and 12 household electrical and mechanical appliances account for the fourth and fifth categories. Gas cylinder equipment, dry batteries, X ray equipment are main categories of the other items due for compulsory IS marks. Packaged mineral water and drinking water were added to the list on 31 March 2001.

The DGFT changed the rigid BIS standard policy, which required a BIS licence by the foreign manufacturer for import eligibility on 28 January 2004. Established importers can now bring in the BIS notified goods and get BIS certification before putting the goods to the market. The foreign manufacturer does not enter the picture in the new dispensation and he is not required to go through the BIS registration procedure. The exceptions are for the following:

a)  Items are required for captive consumption, and

b)  Items are required on continuous basis, and

c)  Items are procured from pre-identified sources.

d)   gifts

e)   approved gas cylinders and valves

This change follows the removal of BIS licence on steel. The text of the amendment giving the revised procedure is in the file <List of BIS Standards for Mandatory Compliance>

The additions to the list in the current amendment cover consumer goods such as immersion heaters, electric iron, stoves, radiators, switches for domestic use, electric bulbs, circuit breakers, fuses, switchgear, cables, meters and transformers. In the absence of harmonised eight digit codes and full product descriptions, the list is bound to cast its ugly shadow over electronics and high end electrical control machinery for the power sector. The customs will detain goods described in an ambiguous manner and allow import only after a heavy penalty going up to 100 percent of value of goods for import without the BIS registration certificate.

Foreign manufacturers or traders of the 159 items must apply to the BIS for registration and satisfy the inspectors of the agency that the factory abroad is up to Indian standards of safety and quality before permission to put the ISI mark on the products is accorded. There is a stiff fee of one percent of import turnover for use of the ISI mark, apart from the inspection expenses. However, an exception has been made for:

a)  Items are required for captive consumption, and

b)  Items are required on continuous basis, and

c)  Items are procured from pre-identified sources.

d)   gifts

e)   approved gas cylinders and valves

The marking rules are in the file <LABELNG_MARKG_BIS>

B. CERTIFICATION PROCEDURE FOR FOREIGN MANUFACTURERS

BIS is operating a product certification scheme for foreign manufactures. Non manufacturer exporters will have to register the manufacturing company with the BIS.

In this scheme, a licence can be granted for any product against an Indian Standard specifying product characteristics, which is amenable to certification. The scheme operates on self-certification basis, whereby the manufacturer is permitted to apply the Standard Mark on the product after ascertaining its conformity to the Indian Standard licensed for. Through its surveillance operations the Bureau maintains a close vigil on the quality of goods certified.

The relevant texts from the law on the subject is given at:

<BIS_REGN_ACT_RULES>.

B1. Application Form

Those desirous of obtaining the BIS licence have to apply to BIS in prescribed application form, which can also be downloaded from BIS web-site at http://www.bis.org.in along with an application fee of Rs. 1000/-. A copy of application form is attached.

B2. Registration

The foreign manufacturer in order to register with BIS is required to set up a suitable office located in India with the permission of Reserve Bank of India. The Indian office is expected to meet all liabilities with respect to BIS Act, Rules and Regulations for purpose of BIS licence. The liability is provided by section 33 of BIS Act. In fact the application itself is to be submitted through authorised person of Indian Branch of the foreign manufacturer (The requirement to set up an office in India does not apply, if BIS enters into an MOU with the respective Foreign government for implementation of BIS Act, Rules, and Regulations including the punitive provisions. According to information available, India has such an arrangement with Bhutan only.)

B3. Processing Charges

Processing charges of US$ 300 are required to be paid after scrutiny and recording of application. The applicant must bear expenditure of travel, stay, miscellaneous expenses like visa etc and per diem as applicable by BIS regulations for a team of officers (normally not more than two persons) for their visit to the manufacturing premises. Cost of testing too must be borne by the firm.

B4. Marking Fee

Licence is granted to an applicant if results of preliminary inspection(s) and testing are satisfactory, the applicant has requisite manufacturing & testing facilities and competent testing personnel and agrees to comply with Scheme of Testing & Inspection (STI) and to pay BIS marking fee as applicable. The licensee must pay the annual marking fee of US$ 2000 + 1% of the invoice price of the product. The annual licence fee is Indian Rs. 1000/-.

B5. Licence Validity

The initial validity period of licence is one year. Licence can be renewed for further periods subject to satisfactory operation of licence as observed during follow up (periodic) inspections, factory & independent testing of samples drawn from factory and market. Cost of such inspections and testing of factory samples must be borne by the firm. The licensee must apply to BIS on the prescribed renewal form along with the renewal fee of Rs. 500/-.

B6. Conditions for Licence

It would be in interest of applicant to submit application for grant of licence only if following is satisfied:

a) Manufacturing facilities are available.

b) All testing equipment to test the product in accordance with relevant Indian Standards are available.

c) The product conforms to the relevant Indian Standard (Test a sample in the laboratory and enclose a copy of the test report with application).

B7. Contact Information

The following departments may be contacted for further enquiry as well as submission of application:

Director & Head (Central Marks Department-1)

Bureau of Indian Stands,

9-Bahadur Shah Marg, New Delhi-110001

Telefax: 91 11 3239382

E-mail: biscmd@vsnl.com

B8. Registration Steps and Costs

Above information along with a study of BIS shows that the requirements to be fulfilled by a foreign manufacturer who is desirous of exporting to India goods which come under mandatory quality certification can be divided into following three stages

    Pre Registration

    On grant of licence

    On operation and use of licence

B8.1 Pre Registration Requirements and Expense

Costs on Opening up of a branch

B8.2 Requirements and Expenses on Grant of Licence

B8.3 Requirement and Expenses on Operation of Licence

Maintenance of complete records of tests and inspection as specified at the time of grant of licence.

Expenses of factory and market testing of samples and minimum two inspection of the manufacturing premises every year. The brief on certification procedures for foreign manufacturers says this will be borne by the foreign manufacturer.

B8.4 Renewal of Licence

An application fee of Rs. 500 (US $11)

The value of marking fee as determined in 5 above will have also to be deposited.

The application for renewal has to be made one month before the expiry of licence.