ELP Podcast Series - BIS in India : Navigating the framework of Technical Barriers to Trade - Part 2

We are pleased to present Part 2 of ELP’s Podcast series on BIS. 

While the 1st part of the BIS certification series covered some key issues and considerations prior to the mandatory enforcement of BIS standards on a product, the 2nd part of the series focuses on the scenario post mandatory BIS announcement. The podcast delves into the steps to be taken by the producers to fulfil BIS standards, the importance of non-disclosure requirements and cross-indemnity while deciding on AIR. The application process is discussed in detail with requisite forms and deadlines.  

Transcript

 | 1.      | Parth to introduce episode | Hello everyone, and welcome back to the ELP Podcast Series  Today, we will resume by completing part 2 of our episode on BIS certification in India. Joining us today is Naghm Ghei, Senior Associate at ELP. Naghm is a young and promising trade lawyer who has been working closely with multinational corporations on non-tariff barriers including technical regulations such as the BIS, over the past two years.  
 | 2.      | Introduction  | We are delighted to have with us Ms. Naghm Ghei, Senior Associate at ELP, for our interview today  Naghm is a young and promising trade lawyer who has been working closely with exporters on non-tariff barriers, including technical regulations such as the BIS, over the past two years. With this, we now move onto our discussion on BIS.
 | 3.      | Question:  Last time we covered some key issues and considerations prior to the mandatory enforcement of BIS standards on a product.  Coming now to the stage where such mandatory BIS has already been announced, what are the next steps for producers?   |  -Thanks, Parth. Firstly, producers need to acquaint themselves with the latest BIS standard applicable to their products. This is because the requirements of the BIS standard, both in terms of testing methodologies as well as product specifications, need to be met to the T for a license to be granted. There is little to no flexibility to producers in this respect. So, the first thing we advise clients to do is grab a copy of the standard, sit down with their technical and quality control teams and ensure that they can meet the requirements.  The second thing that foreign manufacturers specifically must do before applying is to identify their “authorized Indian representative” or AIR. Now the AIR is a critical person as they are essentially representing the manufacturer before the BIS and are held civilly and criminally liable should there be any violations of the BIS Act or the terms and conditions of the BIS license. The AIR also has full information on the manufacturing processes and the entire application dossier. Hence it is crucial to appoint a trusted individual as an AIR.
| 4.      | Question:  So how does one go about finding an AIR, particularly given the risk of liability if something goes wrong?   | There are some minimum requirements that must be met. First, the AIR has to be an Indian Citizen and second, they must be at least a graduate by qualification. Ordinarily, when a foreign manufacturer has an Indian branch office or subsidiary, an individual from the branch office is appointed as an AIR. Sometimes we have seen related/unrelated importers serving as the AIR. Often manufacturers do not have any offices in India or relevant contacts. This is where ELP steps in , compared to other consultants. as we screen the AIR to be professionally qualified as well as ensure that the information remains confidential during the process of the licence through appropriate non-disclosure requirements. Of course, ultimately, we will go by the clients preference and instructions.  As for the question of risk, a cross indemnity can, in most cases, take care of any concerns with respect to civil liability. With criminal liability on the other hand, there are only a few rare instances under the BIS Act that attract criminal liability, such as affixing the standard mark to goods that do not conform to the standard, so long as the company is professional and bound by a code of ethics, it is unlikely that they would engage in such acts.   
| 5.      | Question:   Thanks Naghm. So what happens next?   | The process thereafter is to make the application, which consists of a series of forms providing details of the following:  1.    Manufacturing machinery and process 2.    Testing facilities and equipment 3.    Quality control personnel 4.    Raw materials 5.    Test reports All this information is to be submitted in hard copy to the BIS. For domestic manufacturers, a simplified procedure exists to make the applications online. We understand that the same is being developed for foreign manufacturers as well but will take a substantial amount of time to be rolled out
 | 6.      | Continuation | After the application is made, the BIS may come back with some additional questions or comments on the application. Normally producers will have 30 days to respond. Thereafter a scientist is appointed and a physical audit of the factory+ premises is conducted. This is a 2-day visit. The scientist goes over the entire manufacturing process and understands the machinery in place, meets the QC personnel, and has the tests conducted in his presence. After this is complete, he will also seal a sample to be sent for parallel testing at a BIS accredited lab in India. Once the parallel testing is complete, the BIS will forward the final application to the concerned line ministry of approval upon which a license is granted.  Licensees also need to enter into an agreement with Bis and furnish a 10,000 dollar bank guarantee as indemnification.
 | 7.      | That sounds like quite a long and tedious process! So once the license is granted the producers are good to go for the foreseeable future? | Unfortunately, that doesn’t end the process there. The license is usually only granted for a period of one year, after which it can be renewed for up to 5 years. During the duration of the license as well there are several compliance requirements that have to be met. For example, foreign producers have to submit consignment wise details to BIS on the manakonline portal before shipping the product to India. Further, if there are any changes in the quality control staff or manufacturing process, these have to be communicated to BIS in a timely manner. So overall, the process has several aspects that need to be taken into account. It is advisable for producers to have a dedicated contact point for all these requirements and train their in house personnel as to the requirements. This is important as any violations can attract penalties.
 |  Closing section  
 | 8.      | Parth to close Episode    | -     Thank you for the detailed overview. Hopefully this has been useful to those seeking to undertake the substantial task of applying for BIS certification in India. ELP has been regularly assisting producers with applying for and obtaining such certification. Unfortunately, that’s all the time we have for today but we are happy to take any questions from our listeners and you may contact us further at parthjha@elp-in.com or naghmghei@elp-in.com