One of the strategies of free market competition is to keep the input costs of manufacturing low and sell the products in large quantities. Many among the Asian Tiger economies like Taiwan, South Korea and Singapore which adopted the above-mentioned strategy from 1960 onwards, have risen to the top of the league. China entered the race at the end of the 1970s. But it mastered the technique of low costs and high volumes by the 1990s when Chinese consumer goods flooded the south-east Asian as well as Indian markets. The robust trend continued for more than a decade. Chinese products became a byword for use-and-throw stuff. 

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According to recent reports, 60 per cent of the Bureau of Indian Standards (BIS) registrations — 960 out of 1,574 — are made up of Chinese products, including mobile phones, printers, tablets, notebooks, set-top boxes. The inference from this statistic is that China — aiming to win more markets — is now ready to conform to BIS standards. Chinese manufacturers seem convinced that there is more business to gain from turning out standardised products. This is in complete contrast to the earlier approach of churning out cheap stuff to grab the large, low-income end of the markets. The turnabout means that China has decided to move up the quality chain. It is also part of China’s image makeover as a leading world economy. 

The implications for India are interesting. First, the Modi government is insisting that goods sold in India must conform to the BIS criteria. The process of obtaining BIS approval has been simplified. It means that foreign countries selling in India cannot get away with selling shoddy goods; or use India as a dumping ground for their unsold products. Foreign sellers are made to realise that to be able to sell in India they need to meet the prescribed Indian standards. In a way, India is setting the terms of trade which could soon make it imperative for all goods sold in India to carry BIS endorsement. This is something akin to the approvals international and domestic pharmaceutical businesses are required to secure from the Federal Drugs Administration (FDA) in order to sell their medicines in the United States. Indirectly, India, too, is declaring that it is no more at the lower end of the market economies. And that foreign businesses have to respect the Indian markets.

The Chinese are indeed taking advantage of the quick clearance facility at the BIS. They want to be part of the main street market, and are no longer happy to linger at the level of street-hawkers. For China — this is a bid to win the endorsement of the well-heeled and the well-off sections, which are willing to spend more but are quality and brand conscious as well. The economy of branded products is what distinguishes the big economy from the small one. China wants to be there at the top, in the big league. 

Political leaders, diplomats and economic strategists in India and China have argued that the two countries are in a win-win situation; that the success of one does not have to come at the cost of another. The present example of Chinese producers obtaining BIS approval is a case in point. India is setting up standards — but those are not aimed at excluding foreign players. Rather, they are a means to make available standardised goods to the Indian consumer. By agreeing to conform to the new rule, China can be expected to have a better footprint than before, in the Indian market. Both India and China stand to gain from the new standards.