Indian firms exporting leather and textile products to the EU have to keep abreast with rapidly changing compliance codes to retain their market share.
Compliance codes for environment, health, safety and social norms are broadly the same for EU member nations. The EU is the biggest buyer of India's leather and leather products, consuming around 62% of total exports.
"The exporters of leather and textile products from India to the EU need to ensure that their products do not possess carcinogenic substances. They also need to ensure that they comply with legislation in the developed world regarding endangered fauna and packaging," said Helmut Krause, a standardisation expert with SGS, a major inspection, testing, certification and verification company. The EU is already increasing worldwide awareness of this issue through RAPEX (Rapid Alert System for Non-Food Products), an Internet system with information on hazardous products.
Germany, the largest importer of textile products in the EU and the biggest customer of India's leather trade, has its own compliance rules. They are known as Öko-Tex 100 label and Öko-Tex 1000 standards.
Leading German retail chains have already come together to form a new compliance model, known as AVE Sector, which audits all their suppliers, including India, against compliance with their standards. Some 172 firms from India supplying these chains need yet to be audited.
The introduction of compliance codes in India will have a significant impact on trade, as costs increase with adjusting products and production facilities. "The SGS Group is trying to make leather and textile exporters aware of how the failure of not being able to comply with the various environment, health, safety and social norms may cause them a large revenue loss," said Suparno Moitra of SGS India.
