India set to resume approvals for Chinese imports after five-year freeze

Kolkata|New Delhi: In the latest sign of warming ties with Beijing, New Delhi plans to quickly clear pending proposals by local companies for importing electronics parts, shoes, household items of daily use, steel products, raw materials and other goods from China and other countries.India had stopped approving such imports after ties with China worsened following border skirmishes in early 2020. However, recent improvement in relations and surging demand for several consumer goods spurred by the recent GST cuts led the government to consider this step that entails issuing mandatory certifications of plants in China and other countries to accelerate their exports to India.Last week, the Department for Promotion of Industry and Internal Trade (DPIIT) asked manufacturers for "company-wise details where foreign manufacturers' certification scheme is getting delayed."Helping Meet Local DemandThe department, under the ministry of commerce and industry, also sought all the details and latest status.A similar communication has also been issued to industry bodies and associations.“We will soon begin issuing and renewing licences for suppliers from several countries, including China,” said a senior government official. “We will initiate the process and assess applications on a case-by-case basis.”The Centre is looking to help the industry augment supplies and meet surging festive demand. Sales of several consumer goods items such as automobiles, and consumer electronics peaked after companies reduced prices to pass on the benefits of reduced tax from September 22, causing inventory stockouts.For instance, there's already a waiting period for the first time ever in premium consumer electronics such as large-screen televisions, dishwashers, washing machines and refrigerators, which manufacturers said could take several weeks to get resolved.Bureau of Indian Standards (BIS) approval of each manufacturing unit—in India or abroad—is mandatory for sourcing finished products and their components and raw materials which are under Quality Control Order (QCO), ranging from electronic goods to shoes, and even B2B products. As part of the certification process, a team of BIS officials visits the overseas manufacturing facilities.While approvals for local factories were instant, the delay was noticeable for overseas plants with almost no approval for those in China, disrupting supply chains in India.The latest decision is seen as a signal of renewed engagement in India-China trade talks, following Beijing’s move to resume exports of heavy rare earth magnets to India after a six-month halt, a development that has eased pressure on domestic manufacturers in the electric vehicle, renewable energy and consumer electronics sectors.After Prime Minister Narendra Modi’s visit to that nation and meeting with Chinese president Xi Jinping in August, direct flights have resumed, and India has started clearing Chinese business visas. However, FDI restrictions still remain by way of mandatory Press Note 3 approval from the government required by Chinese companies to make investments in India.In addition to the factor of strained Indo-China ties, the Centre was going slow on BIS approvals to drive its aim of promoting localisation and local value addition. This, even when the industry had been arguing that it needed time to build such capabilities locally.Currently, the level of localisation varies across industry segments. For instance, it is only about 50% for air-conditioners, with the rest catered to by imports.The chief executive of a large electronics company, which is dependent on China for components, said while the government’s intent of localisation and local value addition remains, it has taken a soft stand in overseas BIS approval as often local production and supply chain was suffering due to scarce availability of domestic inputs.