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Introduction

With the establishment of the World Trade

Organisation in 1995 and implementation of

Agreement on Sanitary and Phyto-sanitary (SPS)

measures, countries all over the world started

enforcing stricter measures to protect health

and safety of their consumers by introducing

regulatory import controls, especially in the food

sector. Introduction of regulatory import controls

has been causing problems to the Indian exporters

in terms of multiple inspections, rejections and

recall/destruction of consignments found not

conforming to their requirements. This has made

the role of Export Inspection Council (EIC) and

Export Inspection Agencies (EIA) more relevant

in the context of India’s efforts to set ambitious

export targets and to achieve them.

Export Inspection Council of India (EIC)

The Export Inspection Council of India (EIC) was set

up by the Government of India under Section 3 of

the Export (Quality Control & Inspection) Act, 1963

as an apex body to provide for sound development

of export trade through quality control and pre-

shipment inspection. The Act empowers the

Central Government to notify commodities and

their minimum standards for exports, generally

international standards or standards of the

importing countries, and to set up suitable

machinery for inspection and quality control.

The EIC is assisted in its functions by the Export

Chapter-6

Quality Control and Preshipment Inspection

Inspection Agencies (EIAs) located at Chennai,

Kochi, Kolkata, Delhi and Mumbai having a network

of 35 sub-offices and laboratories to back up the

pre-shipment inspection and certification activity.

In addition, EIC also designates inspection agencies

and laboratories to supplement its own activities

as required.

The main functions of EIC are (i) to advise the central

government regarding measures to be taken for

enforcement of quality control and inspection in

relation to commodities intended for export and

(ii) to draw up programmes for quality control and

inspection of commodities for exports.

The inspection and certification activities are carried

out through the EIAs following either a Consignment-

wise Inspection or a Systems Approach to include

In-process Quality Control (IPQC), Self-Certification

and Food Safety Management Systems based

Certification (FSMSC).

In the changing global scenario, as India’s trading

partners are installing regulatory import controls,

the EIC has re-fashioned its role to develop voluntary

certification programmes besides regulatory

export control, especially in the food sector. The

Council is seeking recognition for its certification

by official import control agencies of its trading

partners, as per provisions of WTO agreements, to

facilitate easier access to their markets for Indian

exporters.

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CHAPTER-6 Quality Control and Preshipment Inspection

Activities and Achievements

Export Certification

Certification continued to be mandatory in the

areas of fish & fishery products, milk products,

poultry products, egg products, meat & meat

products and honey. The EIAs also continued to

certify other notified products such as basmati rice,

black pepper, chemicals, footwear, engineering

items, etc and non-notified products such as tea,

stainless steel utensils, ceramic, etc. Steps were

taken to bring some more areas/products under the

certification regime of EIC. These included products

such as crushed bones, gelatine, ayurvedic, siddha

and unani products; sesame seeds; hops and hop

products; animal feeds and non-basmati rice.

Residue Monitoring

Implementation of ‘residue monitoring’ continues

to be an important area. Residue Monitoring

Plans have been implemented in the fisheries,

dairy, poultry, honey and egg sectors. During

2009-10, a total number of 477 samples were

tested. During April-November 2010, 274 samples

have been tested for the entire range of residues

relating to pesticides, antibiotics, heavy metals

and other chemicals as required by the European

Commission.

Certificates of Origin

EIC/EIAs have continued to issue Certificates of

Origin under various preferential tariff schemes,

namely Generalized System of Preferences (GSP),

Global System of Trade Preferences (GSTP),

SAARC Preferential Trading Arrangement (SAPTA),

South Asian Free Trade Area (SAFTA), India-

Afghanistan Preferential Trade Agreement (IAPTA),

Indo Sri Lanka Free Trade Agreement (ISFTA),

Comprehensive Economic Cooperation Agreement

(CECA)-Singapore and Early Harvest Scheme under

Indo-Thailand have been issued. A new preferential

tariff scheme was introduced under Indo-Chile PTA

which was signed in March 2006 and implemented

w.e.f August 2007. During the year 2009-10, the

EIAs issued 9,35,126 preferential tariff certificates

under various preferential tariff schemes. During

April-November 2010, the number of certificates

issued by the EIAs under various preferential tariff

schemes were 5,21,134.

Strengthening Laboratory Capabilities

EIC is also concentrating on strengthening of its

laboratory capabilities. The laboratories at Mumbai,

Kochi, Chennai, Bhubaneswar, Veraval and Kollam

were upgraded with new equipment including

Atomic Absorption Spectrophotometer (AAS),

High Performance Liquid Chromatography (HPLC),

Inductively Coupled Plasma Mass Spectrometry

(ICPMS), Gas Chromatography Mass Spectrometry

(GCMS), Gas Chromatography High Resolution

Mass Spectrometry (GCHRMS) etc. depending on

the requirements. Laboratories of EIC and EIAs

at Chennai, Mumbai, Kochi and Kolkata have

implemented the system of ISO 17025 and have

been accredited by the National Accreditation

Board for Testing and Calibration Laboratories

(NABL).

EIC also has labs at 13 sub offices for doing routine

microbiological and some heavy metal testing.

These EIAs’ sub-office laboratories were also

prepared for implementation of ISO 17025 and

basic documents have been developed. A total of

24,314 samples have been tested in EIA labs up to

November 2010.

Strengthening Manpower

EIC continued its efforts to train both the internal

manpower as well as have awareness programmes

for the industry. Till March 2010, 25 programmes

were held for internal manpower in which 512

persons were given exposure and 18 programmes

were held for industry in which 639 persons were

given exposure. The basic areas which were covered

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Annual Report 2010-11

included Certificate of Origin, dairy products, fish

& fishery products, Hazard Analysis Critical Control

Point (HACCP), computerisation, laboratory testing

etc.

Computerization and Modernization

Under the Integrated Computerization Project

(ICP) software, all activities performed by the

organisation were divided into 19 modules, which

were further divided into Part A and Part B. Part

A modules of the software contain main areas of

work of the organisation like Certificate of Origin,

Export Inspection and Certification and Testing

Laboratories. Part B modules of the software

primarily contained back-office operations like

Training, Payroll, Vigilance, Legal cell etc. System

Requirements Specifications and Design documents

for 19 modules of the software covering all major

activities of the organisation and back-office

operation were studied and finalized.

Automation of business processes of EIC/EIAs was

started with the development of a module for

processing and issuance of Certificate of Origin.

Other modules were added subsequently to cover

other activities, such as Inspection and Certification,

Laboratory Testing, Training, Payroll etc.

The application modules developed by EIC were

based on the technology available in the year

2002-03 (Net 1.0 & SQL 2000). As the application

and supporting infrastructure has completed its life

and as the current market requirements demand

digital certification besides more efficient and user

friendly approach, the EIC has decided to revamp

the modules taking advantage of the technological

innovations currently available in the IT Sector.

Accordingly, it is in the process of selection of a

suitable Software Service Provider for undertaking

the job.

Agreements with Other Countries

Continued efforts were made towards entering into

Memoranda of Understanding (MoUs)/ Mutual

Recognition Agreements (MRAs)/ Equivalence

Agreements with the major trading partners so that

EIC’s certification is accepted by these countries.

Effective steps were taken towards negotiating

agreements with Italy for sesame seeds, Israel

for food & agricultural items, Brazil for fishery

products, Malaysia for groundnuts and Australia

for egg products. Further discussions were also

held to enter into similar agreements with Japan,

Thailand, Mauritius and Sri Lanka. The Agreement

with Singapore in the electrical and electronics

sector was further streamlined. The status of the

existing MoUs/ MRAs/equivalence agreements is

given in Table 6.1.

Table: 6.1Existing Agreements/Recognitions on EIC certification

Country Products covered Year of Agreement/Recognition

USA Black Pepper 1988European Commission

Fish and Fishery Products, Basmati Rice 1997

Australia Fish & Fishery Products 2002Korea Frozen marine products, processed spice goods, processed nuts,

tea, honey, jam, preserved goods, sauce, sugar2004

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CHAPTER-6 Quality Control and Preshipment Inspection

Turkey Food products, food packaging materials and stainless steel utensils.

2004

Sri Lanka More than 100 products under the Import Inspection Scheme of Sri Lanka namely milk products, edible oils, packaged water, preserved food, toiletries, bicycle tyres & tubes, steel section & wires, electric goods & PVC cables & cords etc.

2005

Singapore Food & Agriculture (egg products, dairy products, drinking

water), Electric & electronic products, Telecommunication equipments and drugs & Pharmaceuticals.

2005

Japan Poultry & marine products 2005Italy Marine sector (Technical cooperation) 2005China Iron ore. 2006Russia Fish & Fishery Products 2009Brazil Fish & Fishery Products 2010

Source: Department of Commerce

Exports

The value of exports certified by the EIAs dur-

ing the year 2009-10 was Rs 10667.80 crore.

During April-November 2010, the value of ex-

ports certified by the EIAs was Rs. 56,090.9

millions as given in Table 6.2.

Table: 6.2 Products Certified for Exports

(Rs crore)

Group/Product Name Value of products certified

Fish & fishery products 4038.54Basmati rice 448.72Black pepper 92.55Egg products 106.57Milk & milk products 800.97Poultry 4.48Honey 64.50Chemical & allied products

5.04

Engineering 19.63Others schemes 28.09Total 5609.09

Source: Department of Commerce

The EIAs have also been authorized to issue various

types of certificates such as health, authenticity,

non-genetically modified organism, etc. for

consignments export.

Fees and Revenue Generation

The basic source of revenue of EIC/EIAs continues to be from monitoring and inspection fees realized for different notified and non notified products as well as certification under GSP and other preferential tariff schemes. The fee charged is at a level of 0.4% of FOB value for products inspected under consignment wise inspection, while it is 0.2% of FOB value for products under systems certification.

Testing is mostly carried out for samples collected

for the purpose of inspection & certification and

are generally not charged, while some samples

are tested for other government departments and

industry on cost basis.

The total revenue generated in 2009-10 by the

organization was to the tune of Rs. 49.47 crore.

The revenue realized between April-November

2010 is Rs. 21.14 crores. The break-up of actual

fees realised under various schemes and activities

during April-November 2010 is given in Table 6.3.

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Annual Report 2010-11

Table: 6.3Break-up of Revenue realised under various Schemes

Schemes/ Activities Actual Fees Realized till 30th Nov 2010

Inspection & certification

Fish & fishery products 760.03

Basmati rice 97.02

Black pepper 42.58

Egg products 32.81

Milk & milk products 94.83

Poultry 1.53

Honey 20.05

Chemical & allied products 2.16

Engineering 6.25

Other Schemes

Others Certification Schemes

40.52

Total from Inspection & Certification 1097.78

Certificate of Origin 997.17

Other Income 20.00

Total 2114.95