India's consumer product safety record improves: Its now up to govt and corporates to build on the momentum
Only collaboration can help drive growth for the most promising emerging market in the world
The way a country protects its citizens is a strong indication of its progress. The concept of safety of citizens is relative. It has been my observation that like Maslow’s hierarchy of needs, safeguarding citizens’ interests too, goes through various levels. There is a visible correlation between the state of development of a country and the extent of consumer protection within the nation. As India has grown economically, it can be observed that the number of sectors that fall under the aegis of consumer protection laws have increased. For instance, the FSS Act of 2006, was formulated to consolidate all laws related to food across the value chain.
Citizens from emerging markets, today, have an increased sense of pride owing to the evolution, in the way they are protected by their governments. The stages in which safety of citizens is ensured, range from the very basic needs of survival (food, shelter) to shields against natural disasters and industrial accidents. I have observed that countries where governments strive hard to take care of the physiological and safety needs of citizens, are generally the ones that develop comparatively faster. This entire process is further augmented by skill development initiatives, that equip citizens to think beyond the basics and widen their horizons.
GDP growth and product safety initiatives
Let’s take a look at India’s GDP growth since 2012. There has been an exponential rise from 5.4 percent to 7.9 percent till 2015-16. If we had to map the various initiatives of the government to ensure safety of citizens against GDP growth, a lot can be deduced. Let us take the example of consumer product quality. The country’s food safety norms that strongly hinged on adulteration, witnessed a paradigm shift to include a wider range of parameters, through the Food Safety and Standards Regulations of 2011. Heavy penalties were also put in place for defaulters.
Similarly, for electronics, in 2013, the Department of Electronics and Information Technology mandated all product manufacturers in India to go through the BIS test for quality. The onset of ecommerce and technology was one of the main drivers of this regulation. The government observed that while technology was driving growth in employment and revenue, it was critical for the devices that facilitate this growth to be completely safe. Regulations for safety of electronics were therefore implemented and are stringent today.
Food and electronic gadgets help countries cover a lot of ground on the road to development in many direct and indirect ways. I believe there is a strong correlation between growth and a sovereign effort towards ensuring the safety of food and electronic products. Visibly, countries producing high quality food and electronic products are the more developed ones.
Observations from a research study
Let’s evaluate these observations by comparing two developed and two emerging markets.
A study recently launched by us ‘TÜV SÜD Safety Gauge Survey 2017’ across US, Germany, China and India has some interesting findings. It indicates that more Indian and Chinese consumers are ready to pay a premium for safe products in comparison with their counterparts in US and Germany. This could be rooted in the fact that of the four countries, India and China are also markets where consumers experienced the highest number of product safety issues. Another key driver of this fact could be the government’s efforts to have stringent product safety measures in place. In fact, our study also shows that businesses in India feel that they are more likely to exceed safety standards set by the government in the next five years.
It may be noted that both these markets are emerging to become superpowers. Governments in these markets are looking to empower citizens. Consumers’ willingness to pay a premium is a clear indicator of the fact that awareness and purchasing power are driving the change in product quality.
In more ways than one, the quality of any food or electronic product has a direct impact on the well-being of an individual. As the work force of a country is healthier, it will have a lower down time, which will lead to a better output and contribute towards economic growth. Additionally, quality products manufactured within the market have the potential to be exported across the world which can have a ripple effect in the nation’s foreign exchange earnings.
Collaboration is key
A large part of safety of consumer products is beneficial only if the government and businesses collaborate to come up with symbiotic solutions.
Most Indian businesses source raw materials from within the country, which helps them to overcome cost barriers. However, assuring safety of raw materials is difficult in a nation with the geographic expanse of India. Our study shows that Indian businesses are the highest among all four countries surveyed, to source products locally. This makes the case for cost effective production. If the government can further make quality control more stringent, businesses will have to make lesser efforts to ensure the safety of products, thus driving down their costs and increasing profitability.
While supply chains are complex, a highly impactful way is for governments and businesses is to partner with global third-party agencies to help ensure the quality of locally sourced products. The revolution in consumer product safety has started in India. The government has made mammoth efforts to ensure the safety of consumer products, and businesses are also trying. The time has now come for the government, businesses and consumers to connect the dots, because only collaboration can help drive growth for the most promising emerging market in the world. After all, healthy citizens will build a healthy nation.
(The writer is CEO, TÜV SÜD South Asia & South-East Asia, Middle East & Africa Region)
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