Consumer policy and consumer protection

Project description

Title: Consumer policy and consumer protection in India
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: India
Lead executing agency: Ministry of Consumer Affairs, Food and Public Distribution of the Republic of India (MoCAF&PD)
Overall term: 2012 to 2015

Context

Due to the growth of the Indian economy, the liberalisation of former state monopolies and the introduction of new technology, the challenges faced by Indian consumers are changing substantially. In turn, consumers have greater expectations with regard to market access, quality, service and sustainability. In view of the wide range of new products – from packaged foodstuffs to light-emitting diodes – and services available, extreme demands are being placed on Indian buyers. On the one hand their purchasing power is rising steadily, while on the other hand they are having to make increasingly complex purchasing decisions. Yet they scarcely have the information they require to obtain an overview of the products available, compare the services on offer and identify those products that meet their needs.

Adequately equipped official test centres where Indian manufacturers and businesses can have the quality of their products tested to meet statutory requirements are few and far between. There are also insufficient opportunities to calibrate machinery and instruments accurately for the manufacturing process. This may result in the contents of packets of rice being contaminated and not containing the specified quantity. Products such as photovoltaic cells, light-emitting diodes and foodstuffs must be inspected to assess the risks they could pose to consumers and users. However, there are not enough suitable laboratories and testing equipment, and those that are available do not meet the necessary standards. The small numbers of metrological instruments on hand are outdated or uncalibrated, meaning that standardisation and measurements cannot be carried out satisfactorily.

The consequences of shortcomings in the testing and calibration infrastructure, for example for people buying basic foodstuffs, fuel and transport services, are serious, particularly for poorer consumer groups. At the same time, the lack of consumer awareness for the value of safe, healthy, high-quality goods and services is exacerbating the negative consequences of consumption on the environment and the climate.

Objective

Consumer policy and consumer protection in India have been strengthened. State quality inspection and calibration and metrology institutions are able to perform their tasks more effectively.

Approach

Since mid-2014, the project has been advising the Indian Ministry of Consumer Affairs and downstream quality inspection, calibration and metrology laboratories, and is helping to improve their services. It is supporting the scheduled expansion and renovation of laboratories, work which is being funded by the Indian Government. It is also promoting a dialogue on consumer policy among stakeholder representatives from politics, public administration, the private sector and consumer associations.

Advice on improving laboratory services. In the field of quality inspection, support is being provided to the National Test House to enable it to set up quality inspection services for photovoltaic cells, light-emitting diodes and foodstuffs. International experts are advising partners on construction planning and laboratory fittings. Laboratory technicians are undergoing continuing professional development. In the second field – that of statutory calibration and metrology – support is being provided for the establishment and renovation of three laboratories: the regional reference standards laboratories in Bangalore and Varanasi and the secondary state reference materials laboratory in Varanasi. These laboratories are to be enabled to provide their services with the aid of improved measurement technology. The fields concerned are mass metrology including non-automatic weighing instruments and fuel dispensing equipment. Training courses are being prepared for laboratory technicians. The courses themselves are funded by the Indian partner.

Promoting the consumer policy dialogue. The project is strengthening the dialogue between the authorities and representatives from consumer policy, the private sector and consumer organisations. This dialogue is concerned with establishing an evidence-based consumer policy. Internationally recognised methods of developing consumer policy are discussed and their applicability in an Indian context reviewed by means of a pilot study, for example on the regional availability and pricing of a consumer product. It is only with an awareness of consumer skills and problems that consumer policy can effectively intervene in the market, for example by mandatory labelling requirements. One of the items on the agenda of the Indian Ministry of Consumer Affairs is the labelling of packaged organic foodstuffs. Foodstuffs claiming to be organic are increasingly popular with India’s middle income groups. However, their labelling is unclear and confusing. Proposals for improvements are being drawn up based on a comparison between existing labelling and international standards.