Written with Saruabh Singh and Parminder Singh

Compulsory Registration Order 2012

Around the world information and communication technology (ICT) is enabling governments and businesses to improve productivity, quality of life, and communication. In a world driven by innovative technologies, it is the growing consumption of electronic products that is enhancing the reach of ICT. India alone is expected to consume USD 400 billion worth of ICT products annually by 2020 with three-quarters of this demand expected to be met by imports.

While electronic products help take technology to the masses, their increasing presence in our lives has caught the attention of governments and think-tanks that are initiating discussions and pushing for appropriate policy ecosystem to ensure that consumers get access to safe and good quality technology products.

The Indian government too has been taking positive steps in the interest of the safety of consumers. Government of India has notified the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order in October, 2012. The Order, which is applicable to manufactured as well as imported IT goods, mandates safety testing and certification of 15 categories of information technology (IT) products by Bureau of Indian Standards (BIS) accredited labs. The BIS registration scheme is also expected to strengthen electronics testing and certification infrastructure in India.

However, given the vast scope of products covered under the scheme, the implementation of the Order faces several challenges. The biggest challenge facing the immediate implementation of the Order is the inadequate in-country testing infrastructure. At the moment there are only six BIS accredited labs with a monthly capacity to test fewer than 400 products, while there is a demand for more than 8000 products to be tested each month.

Government of India has acknowledged the enormity of the registration exercise and in a welcome move extended the compliance deadline of April 3, 2013 by three months. The extension of the deadline is an opportunity for the government and industry in India to come together for smoother implementation of the Order. To comply with the Order, several aspects of it need to be clarified, and in this respect IT manufacturers and importers need further support from the government.

Another major challenge is the coverage of “Highly Specialized Equipment” (HSE), including large industrial printers, servers, and storage in the scope of the Order. Destructively testing millions of dollar worth of equipment that have annual sales of a few units will make them economically infeasible to be sold in the Indian market. This will deprive the commercial consumers the access to the latest technology with a serious possibility that the manufacturers will altogether withdraw these products from the Indian market.

The testing of specialized products under this Order is not a practical option also because they are used in controlled environment by trained professionals who are well-versed with procedures to manage and mitigate security risks of the equipment. Such commercial equipment that is not a threat to mass consumer safety could be covered under separate standards such as the Machinery Directive of the European Union, which considers such equipment as industrial machinery.

Yet another implementation related concern is the inclusion of warranty replacement units in the scope of the Order. In this respect the manufacturers’ inability to safety-test discontinued units will severely impact their ability to fulfill warranty obligations, leading to significant consumer dissatisfaction.

There are also various other implementation issues ranging from series formulation, and product coverage, to labeling that require further clarification and consultations with the industry. In the absence of a well drafted process, compliance with the regulation will be irregular and chaotic.

The Indian regulatory environment needs to ensure the safety of the electronic and IT products while facilitating business growth and investment into the country. It can be clearly foreseen that if the industry and government do not work together to resolve some of the large implementation bottlenecks, the Rs 70,000 Cr IT and electronics industry in India will be negatively impacted in the coming months.

To ensure hassle free implementation with the Order, as well as to work towards the establishment of mechanisms that guarantee safe IT and electronic products, government and industry need to increasingly collaborate. An increased industry consultation through regular technical committee meetings is necessary to overcome the prevailing challenges in the implementation of the Order. We hope that the government and industry will work together to make this transition a success for the growing number of Indian ICT consumers.