Goyal signals BIS certification exemption for high-tech companies, including those from Japan

The announcement by Commerce and Industry Minister Piyush Goyal regarding a proposed framework to exempt high-tech companies from mandatory Bureau of Indian Standards (BIS) certification marks a significant policy recalibration in India's industrial strategy. To understand the gravity of this move, we must first appreciate the historical context. The BIS, established under the BIS Act, 2016 (which replaced the Indian Standards Institution under a 1986 Act), operates as the National Standards Body of India. Its certification scheme, particularly the Compulsory Registration Scheme (CRS) mandated by the Ministry of Electronics and Information Technology (MeitY) for electronics and IT goods, has long been a gatekeeper for market entry. While the intent—ensuring consumer safety, product quality, and preventing dumping of substandard goods—is constitutionally aligned with Article 47 (duty of the State to raise nutrition and standard of living) and the Consumer Protection Act, 2019, the implementation became a formidable non-tariff barrier. The specific catalyst for this policy shift was the sustained feedback from Japanese investors, a key stakeholder in the India-Japan Special Strategic and Global Partnership. During various bilateral forums, including the India-Japan Industrial Competitiveness Partnership, Japanese majors like Suzuki, Toyota, and semiconductor equipment suppliers flagged that the mandatory BIS certification for imported capital goods—machinery, testing equipment, and specialized tools not meant for retail sale—was causing inordinate delays (often 6-12 months) and escalating project costs. This friction threatened the "Make in India" vision, launched in 2014, which aims to raise the manufacturing sector's GDP share to 25%. If the very machines needed to build factories are stuck at customs awaiting certification for standards they already meet globally (ISO, IEC, JIS), the initiative stalls. The significance for India is multi-dimensional. Economically, it directly addresses the semiconductor mission. With domestic demand projected to hit $150 billion by 2032 (up from ~$24 billion in 2023) and the government committing $10 billion under the India Semiconductor Mission (ISM), easing capital goods import is critical. The first semiconductor fabrication plant by Tata Electronics and PSMC in Gujarat, and the OSAT facility by CG Power in Assam, require highly specialized lithography and etching machines. Subjecting these to domestic consumer-goods standards was a category error. Politically, it signals regulatory maturity—moving from "inspection raj" to "risk-based regulation." It aligns with the "Ease of Doing Business" reforms (India jumped to 63rd rank in World Bank's 2020 report) and the Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalized minor procedural lapses. Constitutionally, this falls under the Union List (Entry 52: Industries; Entry 30: Standards of quality) and the Concurrent List (Entry 33: Trade and commerce). The BIS Act, 2016, empowers the Central Government to notify mandatory certification. The proposed exemption framework would likely be a notification under Section 14 or 16 of the Act, carving out a "strategic/high-tech" category. This mirrors global best practices; the EU's CE marking and US FCC certification exempt capital goods for R&D and manufacturing. Broader themes converge here: cooperative federalism (states like Gujarat, Tamil Nadu, Karnataka competing for fabs), international relations (deepening supply chain resilience with Quad partners—Japan, US, Australia), and technology sovereignty (Atmanirbhar Bharat in critical minerals and chips). The recent India-Japan Semiconductor Supply Chain Partnership MoU (July 2023) gains operational teeth with this reform. Future implications are profound. We can expect a tiered certification regime: fast-track/automatic approval for equipment from MRA (Mutual Recognition Agreement) partner countries (Japan, Germany, US) for defined high-tech sectors (semiconductors, aerospace, defence, green hydrogen). This could extend to the Production Linked Incentive (PLI) scheme beneficiaries. However, safeguards against misuse—defining "high-tech" narrowly, preventing finished consumer goods from masquerading as capital equipment—will be the regulatory challenge. The next 12-18 months will reveal if this framework becomes a template for regulatory agility in the Amrit Kaal.