IT industry about to lose Rs. 1000 Crore

IT-industrySince long, the Manufacturers Association for Information Technology (MAIT) had been highlighting the industry’s concern on the way the Government has decided to implement the Requirement for Compulsory Registration Order 2012. MAIT has informed that the Industry will be suffering losses of over Rs 1,000 Crore if the deadline to implement the order is not extended. Ramdas S speaks to Anwar Shirpurwala, Executive Director, MAIT on the statutory government order.

What is the the requirement for Compulsory Registration Order 2012?

This was an order which was passed by the Central Government in October 2012, which makes it mandatory for all manufacturers to get their electronic products certified for compliance with Bureau of Indian Standards (BIS). Government had identified around 15 categories which includes among others laptops, video games, tablets, plasma/LCD/LED televisions, printers and scanners, telephone answering machines and electronic music systems. We believe, the Government has taken this step to ensure that electronic products made available to Indian consumers meet a specific quality standard, which is welcome by everyone in the industry.

Essentially all products except desktop computers and components come under the order. The deadline of the order is April 3, 2013.

What happens after April 3, 2013?

An order has been passed by the Government which has advised various customs ports to allow import of goods that has received the BIS standard. We have been told that a product model that has not received certification will be confiscated, and not allowed to be brought into the country.

While MAIT welcomes the government order, there are just six labs in the country which offers testing services which can certify a product. The combined capacity among these labs is just 500 devices per month at this point of time.

We estimate that among the recognized players alone there are 8,000 models that needs certification, and government recognized labs are unable to certify all these products before the deadline, and the backlogs are huge.  This could seriously impact business, and we estimate an immediate loss of Rs 1,000 crore to the industry, if government goes ahead with April 3 deadline. There will be shortages of several product lines, and could result in finally the consumer paying for more. It is not in interest of anyone.

What is your expectation from the Government?

We are completely in support of Government decision to set standards. The order can help resolve several challenges faced by the industry and instill confidence among consumers in long run. It may even curb parallel imports.

However, we want the logistics to gear up. We want Government to build more capacity in terms of labs. In IT industry even a four week delay is crucial with product life spans getting smaller every year.

Our first request is to postpone the deadline at least by six months, and then increase the number of labs. We also want Government to simplify procedures so that no vendor is unnecessarily hassled, and consumers in the country have latest and best available products at lowest price always.