a day ago
Risks of neglecting quality standards in pursuit of growth
A growing debate has emerged around the use of non-tariff barriers to enforce quality standards, with concerns that such measures could lead to increased input costs. India is poised to become the third largest economy sooner rather than later. It is important not to compromise on prescribed quality standards in products directly related to economic growth and development in multiple sectors leading to optimum use of scarce resources with the purpose of making the investment long-lasting and durable for the stakeholders.
This has direct relevance in the case of enforcing laid down quality standards on Poly Vinyl Chloride (PVC) industry that serves as a critical intermediate product serving over 29% of the Indian economy. Due to its versatility, durability and affordability, the use of PVC ranges across several critical sectors in the Indian economy including agriculture, construction, pharmaceuticals, health care, electronics and water supply infrastructure. It is widely used in plumbing systems for drinking water supply, drainage and irrigation, insulation for wires and cables, window frames, doors, proofing sheets and wall coverings in the construction industry, IV bags, blood bags, tubing and catheters in the health sector and as packaging materials including films, bottles, containers, floorings, toy and sports goods, among others.
At present, the quality standards prescribed on PVC by the Bureau of Indian Standards (BIS), issued in Feb'24, is yet to be made mandatory. China has a huge manufacturing base but it is predominantly carbide-based production where the product does not comply with prescribed quality standards of BIS. This is because the Residual Vinyl Chloride Monomer (RVCM) content exceeds two parts per million and is carcinogenic. Since the BIS standard is yet to be enforced, the Indian consumers are exposed to health risk from the import and usage of such product, where end use products made out of such non-standard quality PVC resin come in contact with foodstuffs, pharmaceuticals and drinking water.
The recent escalation of tariff measures by the US, wherein reciprocal tariffs have been raised on South East Asian (SEA) countries including China, is of significant concern to India. The probability of Indian market becoming a dumping ground for the surplus low-quality material from China is very high, and there is considerable danger to the end-users, unless it is regulated by the prescribed quality standards of BIS, since India is a PVC deficit market.
The domestic industry is investing over $ 10 billion in setting up capacities of around 3.3 MMTPA towards becoming self-reliant in PVC and fulfilling the Make in India vision of the Prime Minister. In the interim, if such unregulated imports are allowed it will not only spoil the market but also lead to less than optimal investment returns in this strategically important sector. This will also dampen the spirit of the producers who conform to the quality standards. It is, therefore, not only imperative for the government to immediately enforce the standards in the interest of the well-being of the society and industries using PVC but also to assure that the infrastructure development of the country occurs in a durable and stable manner.
This article is authored by K Skandan, former secretary, industries, Tamil Nadu and former advisor to Governor, J&K.
