What is Quality Control on Export?

Quality control inspection and pre-shipment inspection are a mandatory prerequisite for exporting goods outside the boundaries of a country. Only the best quality products are exported outside the country, and Quality control inspection ensures that the product that has to be exported satisfies export requirements. It is regulated under Section 3 of the Export (Quality Control and inspection) Act, 1963 and is monitored by the Export Inspection Council {EIC}. Over 1000s of commodities are listed in the act which is subject to compulsory pre-shipment inspection, and it is majorly divided into groups as follows;

Food & agriculture
Fishery
Minerals
Organic chemicals
Rubber products
Refratories
Pesticides
Ceramic products
Light engineering steel products
Jute products
Coir and coir products
Footwear and Footwear components/products

Sometimes the Indian standards do not match with the buyer's country's rules. In that case, the buyer demands precise specifications of their own, which the exporter has to fulfill. These are issues that have to be sorted out before confirming the order.

What is the Pre-Shipment Inspection?

The process of inspection of batches of goods just before the shipment to determine whether they satisfy the requirements/ conditions of shipment standards/quality is a pre-shipment inspection. These inspections are done in terms of quality, weight, paying attention to packaging, storage methods, and transport, contraband character, etc.

Role of Export Inspection Council in Quality Control and Pre-Shipment Inspection

The Export Inspection Council encourages exporters to implement the best quality management systems and technologies to produce goods that meet the buyer's specifications and needs. They do this to gain a buyer’s trust and to retain them.

Export inspection agencies are monitored and regulated by the Export Inspection Council. There are over 40 offices running under the Export Inspection Council that are involved in pre-shipment, quality control, and certification of various laboratories across the nation. They engage in all schemes of pre-shipment and quality control inspection i.e., consignment to consignment inspection scheme, in-process inspection scheme, and self-certification inspection scheme

Various Schemes and Their Procedure for Export

There are three systems of -shipment and quality control inspection schemes recognized by the Export Inspection Council {EIC}, namely;

Self-Certification Scheme
In-Process Quality Control Scheme
Consignment to Consignment Inspection Scheme

Self-Certification Scheme

Large manufacturing units and exporters having a good reputation are allowed to certify their product. Considered the exporter is the best judge of their products.

First, the exporting company having a good reputation and adequate testing equipment apply to the Director (Inspection and Quality Control), Export Inspection Council of India. (11^th floor, Pragati Tower, 26 Rajendra Palace, New Delhi)
Then it issues a certificate to allow the manufacturers of engineering products, marine products, and chemical and allied products to export their products. This certificate is legitimate for one year.
This approval is notified in the Gazette of India. Moreover, the exporter has to pay a lump sum fee to the Export Inspection Agencies depending upon their turnover.

In-Process Quality Control Scheme

As the name suggests, the inspection is conducted at various stages of production. This scheme is applicable for products like chemicals or engineering products.

First, the exporter needs to register his unit as "Export Worthy." Also, they need to maintain records of processing and production
Under this scheme, the unit is allowed to export based on the adequacy of IPQC and the inspection measures carried out by the groups themselves
The approved manufacturing plants can issue a certificate by themselves only for the products which meet the IPQC standards
Moreover, these units have the facility to choose either to get the certificate from the Export Inspection Agencies {EIAs} or to issue it themselves.

Consignment to Consignment Inspection Scheme

Under this scheme, each shipment is inspected by the EIA. The exporter has to follow these steps to export their products;

The exporter needs to duly fill the “Intimation for Inspection” form before the expected date of shipment of the consignment and submit it to the Inspection Agency
The inspection of the consignment is carried out either at the premises of the exporter if proper equipment is available with them or at the port of the shipment
After review, if the agency is satisfied that the goods meet the specified standards mentioned in the export order/contract it issue the necessary certificate in five copies. It is issued generally within four days after submission of the receipt of intimation
The certificate is issued in the standard form which supports the pre-shipment export necessary paper.
The copies are distributed as follows;
original for customs use
2^nd copy for use by importer
3rd print for the exporter's use
4^th for the Data Bank and
the last one for the Export Inspection Council of India

necessary papers Required For Quality Control and Pre Shipment Inspection

These are the necessary papers necessary for quality control and pre-shipment inspection that needs to be submitted along with the application;

Details of the items that are exported
A demand draft covering the prescribed fees
A copy of Letter of Credit
Importer’s approved samples and/or technical specifications
A copy of the commercial invoice
A copy of export contract/order indicating that the products are of good quality and in compliance with the specified quality standards

Benefits of Quality Control Inspection

The following are the advantages of Quality Control Inspection and why it is necessary:

Improves customer satisfaction

The consumers like products that are of satisfactory quality and they prefer buying products that are of high quality
Encourage quality consciousness

The concept of quality control encourages the workers of the company to achieve and maintain those standards
Reduces production cost

Use of quality control effectively of products also reduces production cost as it reduces wastage and brings down wastage
Increases reputation/goodwill

Maintaining quality also retains customers, and it maintains a good reputation of that company in their minds.

Moreover, the producing company can also raise funds/ finances from the market
Increase the morale of employees

The use of an effective quality system helps increase the confidence of the employees as they feel motivated. Also, they think they are working in the benefit of the consumers/ nation and are producing high-quality products
Improved methods/ techniques

Quality control also ensures that improvised methods and designs are used by supplying technical engineering and other technical data to deliver goods
Advertising

Advertising helps companies educate the general public about the product any company is producing. Moreover, companies offering quality products win public confidence easily
Facilitates fixation of price

Quality plays a significant role in determining the cost of the product
Help accelerate/increase sales

Quality control of products also attracts customers. It ensures that products are produced keeping in mind to maintain the product's quality and that is what attracts the general public's attention
Promotes and builds rapport of the Indian industries
It sustains the foreign market

Challenges in Maintaining Quality of Export Products

These are the primary reasons where exporters face while maintaining the quality of their products;

Lack in consciousness for quality maintenance
Lack of adequate facilities/ technologies
Most producers/ exporters do not have access to proper raw material, components, etc. or specific applications

Role of ISI Certification and AgMark Certification for Export

ISI Certification and AgMark Certification play an important role in exporting products. Let’s see what these are and how they affect the export process:

ISI Certification

This is a mark used for certifying industrial products in India since 1955. A product having this mark indicates that it meets the quality standards specified by the Indian Standards Institute now known as the Bureau of Indian Standards.
AgMark Certification

AgMark is an acronym of Agricultural Marketing. AgMark is the certification given to food products that pass the tests used to check their quality.

Role of ISI Certification and AgMark Certification for Export

Electronic products that have ISI Certification and food products having AgMark do not need any additional inspection for their export. These products are not covered for review by the inspection agency network. Furthermore, the customs authority allows these kinds of products even without a pre-shipment inspection certificate. Provided that these products already comply with the quality standards and these authorizing bodies are satisfied that the goods carry ISI Certification or AgMark.

ISO 9000

ISO 9000 plays a vital role in international trade. It is developed to help companies effectively necessary paper and maintain various elements of the quality system. It is defined as a set of international standards related to quality management and quality assurance. They are not industry-specific and can apply to anycompany of any size.

ISO is the abbreviated form of the International Organization for Standardization. It is an international organization that specifies standards in over ninety countries. The objective of this federation is to promote common standards, and it defines "harmonize" product, services and business practice i.e., maintaining specified standards throughout these countries

Benefits of ISO 9000: The aim of ISO 9000 is to implant a quality management system within organizations to increase productivity, reduce unnecessary costs, and to endure the quality of processes and products.

Units Exempted from Pre-Shipment Inspection

There are certain units that are exempted from the requirement for mandatory pre-shipment inspection, they are as follows;

Export House
Trading House
Super Trading House
Super Star Trading House
100% export oriented units that are set up in the Export Processing Zones/Free Trade Zones
Units where the buyers do not want Pre-Shipment Certificate
Products that already have ISI and AgMark