indiamarkets: What are the reasons for setting up Ascon within the CII and what is its main role?

Dilip Chenoy: Basically, we have always had various associations within the CII which meet regularly, but I found there was no focus on the role each of these had to play. But in 1995, when Mr. Subodh Bhargava was the vice-president of the CII, he decided to sharpen the focus to give more synergy to these associations..

Based on the model found overseas, we renamed the committee of associations as the Associations’ Council (Ascon). The main task was to monitor the state of industry as we found that the industrial data was not available even six to eight months after we began, hence we started working on the trends available with the industry. Even if trends are 1-2 per cent off the actual figures, we thought it was okay as long as they reflect the direction of the industry.

The second  point was that  there was a lot of synergy in terms of buying and selling, but the consumer was missing. And then there was this mis-match between all the three __ buyer, supplier and consumer __ due to the fact that all of them used to move in different directions. So, Ascon made this attempt to build a consensus on policy suggestions. The idea was to get all the associations together and approach the Government with a consensus view. The fourth area which is truly the underlined purpose behind Ascon was that within the associations, there was a varying degree of professionalism. We then started sharing information about each sector so that all the presidents of the various sectors can share information during meetings. This helped them prepare for presentations about their respective industry.

indiamarkets: What are the different sectors covered under Ascon?

Chenoy: We have 100 associations, 23 division, and 11 national committees from within CII. All the telecom associations such as TEMA, COAI, ABTO, ISPIs; pharmaceutical associations like BDMA, IDMA, OPPI, IPA; capital goods industry associations, automobile sector associations, components manufacturers’ association and tractor manufacturers of the country are members of Ascon. It also cuts across the spectrum of management. We have seven broad categories such as telecommunications, chemicals, steel, IT, textile, consumer goods, and capital goods.

indiamarkets: What is Ascon’s role in the food and agriculture sector?

Chenoy: We have about four different divisions here. The first is the agriculture committee of the CII headed by  Nanda, the second is the FMCG committee headed by Banga, then there is the association of Indian Food Processors’. Besides, there are the confederation of alcoholic beverages association, the Hotel Association of India (HAI) and FHRAI; the soft drink manufacturers’ association, biscuit and confectionery manufacturers are also members of Ascon. Indian Sugar Manufacturers’ Association (ISMA) is a member. We also have institutions like Apeda, Mpeda, Cashew Export Promotion Council. We invite everybody for the meetings which we hold with the government, for pre-budget, post-budget, Exim policy. We work in consultation with the industry. Though we have our independent view, we do consult them. And then, we also have the food regulatory council.

indiamarkets: What are the implications of the WTO rules on the Indian food industry, food safety & quality especially as regards to exports?

Chenoy: There are different streams of influences of the WTO on the Indian food industry. The first is the SPS Agreement, which determines the non-tariff technical barriers to trade in processed foods. It talks about the related laws, international standardisation; this means that international laws shall apply to all cases unless the Government can prove that international laws are detrimental to public safety and health. This rule will become effective from January 1, 2001. The second relates to tariffs which will come down in due course of time. The third area of focus is removing distortions like subsidies specially in the EU and preventing investments in a particular country. Finally, rules for hygiene and public safety will have to be implemented down here.

indiamarkets: What is the role of  the Government in promoting and protecting the food industry in the country?

Chenoy: The Government, in different aspects of agriculture, has a very vital role to play merely because agriculture is State-controlled. The Government has also set up all these commodity export boards like APEDA, MPEDA. Moreover, the food regulation vis-a-vis package commodity rules, food processing order, prevention of food adulteration act, are all Government-controlled and cuts across different aspects. At a broader level, the duty structure like excise and customs duty, sales tax are also controlled by the Government. The whole co-operative movement and many companies like Nafed, Markfed, and IFFCO are under the control of the Government.

Of late, we are seeing a lot of government action. For the first time, a new agriculture policy, draft food processing policy, mineral water standards are all being formulated, a national codex committee being set up.

 On the other hand, the Indian States are having a fragmented approach in promoting these sectors. On their part, they need to invest in a lot of infrastructure planning like wasteland development, recovery of saline land, increasing the land productivity, setting up of state agriculture colleges, state agriculture research institutes and various other issues.

indiamarkets: What are the technical barriers to trade in relation to food articles?

Chenoy: The technical barriers to trade are very subtle. There is restriction on the usage of certain types of pesticides and food additives from different countries.

Some countries harp about the label, which according to them should be of a particular shape and in different languages.  For many, the entire unit should be HACCP-certified; only then can the food can be imported. It can relate from quality standards to manufacturing processes, to additives what a food product can contain, packaging, storage and handling and to finally shipment.

India can also do that if the rules are implemented by the Government. Therefore, today we get more than 50 per cent food items in the markets which do not conform to Indian rules. Many imported products available in the market don’t comply to lable, language, and even MRP specifications. The Indian packaged commodity rules now need to be amended to cater to such kind of products. For example, Indian chewing gum manufacturers can not use PHA which is an anti-oxidant agent, but the other brands which are available in the Indian market contain PHA.

At the international level, Codex lays down the standards. According to WTO, anything which confirms to Codex should be allowed to be imported, manufactured, and sold in any country, unless the country’s health authority comes out with substantive health and other reasons on why the product should not be sold in that country.

indiamarkets: What are the recommendations on the issue by CII to the Government?

Chenoy: We have set up a food regulatory council under the Ascon, which has all the members of different associations in it. We have come out with detailed recommendations on changing laws in the food products order, changing the whole PF Act, and changing different aspects of PFA rules. We are also proposing harmonisation of all rules, under the food development authority. Basically, six recommendations put up in the Nusli Wadia report in the Prime Minister’s Task Force were inputs from Ascon. We have a set of recommendations for the packaged commodity rules. Basically we are asking the government to simplify the laws and increase mechanisms to check implementation of rules.
 
 

Dilip Chenoy can be contacted at dilip.chenoy@ciionline.org

Confederation of Indian Industry (CII)
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