Source: The post “Rollback of Quality Control Orders” has been created, based on “Rollback of quality control orders is good, but don’t make haste” published in “Indian Express” on 28th November 2025.
UPSC Syllabus: GS Paper- 3- Economy
Context: Quality Control Orders (QCOs) are mandatory product standards imposed under the Bureau of Indian Standards (BIS) Act to regulate imports and ensure quality. Over the last eight years, India shifted aggressively toward mandatory standards, covering more than 1,300 goods. Recently, the government suddenly withdrew over 20 QCOs, signalling a correction but also revealing systemic issues in the implementation of industrial regulation.
Evolution and Expansion of QCOs in India
- Limited Use Before 2014: QCOs were marginal in India’s import system, and control over imports was exercised mainly through tariffs, anti-dumping duties, and safeguard duties.
- Post-2017 Expansion: The 2017 BIS Act gave ministries broad authority to impose mandatory standards. This led to a proliferation of QCOs across consumer goods, capital equipment, industrial inputs, textiles, plastics, and chemical intermediates.
- Nearly 25% of QCOs covered raw materials and upstream inputs, not just final goods.
Problems Arising from Aggressive and Hasty QCO Implementation
- Upstream Certification Bottlenecks: Many QCOs required factory-level certification of every foreign supplier, creating double-certification traps.
MSMEs suffered because they needed BIS approval for both imported inputs and finished goods. - Severe Supply Chain Disruptions: In plastics, India imports many specialised polymers; foreign suppliers often choose not to comply because India is a small market. Import refusals pushed up global prices and created shortages for MSMEs in packaging, electronics, and medical devices.
- Impact on Textiles: QCOs on inputs such as yarn and fibre, introduced in 2023, raised domestic fibre prices above world levels. Since synthetics account for 70% of global fibre consumption, Indian exporters became uncompetitive due to the unavailable certified inputs.
- NOC-Dependent Steel Trade: The steel ministry required nearly all steel imports to obtain a No Objection Certificate (NOC) even if they were not covered by QCOs. This created long delays at ports such as Nhava Sheva and Mundra, with containers stuck for weeks.
- BIS Inefficiency: BIS’s foreign factory audit system became notorious for inconsistency and delays. Some applications were cleared quickly, while others languished for months, enabling de facto monopolies for the few suppliers who secured early certifications.
Reasons Behind the Government’s Recent Rollback of QCOs
- High Compliance Costs and Industry Pushback: MSMEs faced unpredictable sourcing, inflated prices, and supply shortages, prompting widespread criticism.
- International Pressure: Trading partners criticised India for non-transparent regulatory barriers, complicating India’s global trade relations.
- Gava Committee Review: A committee chaired by former Cabinet Secretary Rajiv Gauba reportedly recommended action on 208 QCOs. The committee suggested: Revoking 27 QCOs, Suspending 112, Deferring 69 and Scrapping the NOC regime.
- Although the report is not public, the rollback indicates that many QCOs were not industry-tested or transition-friendly.
New Emerging Risk
- Opposite Problem After Rollback: With QCO barriers removed abruptly, downstream industries fear a surge of cheap imports, especially from China.
- Vulnerability of Capital-Intensive Sectors: Industrial raw materials are capital-intensive, and sudden exposure risks supply shocks and unfair price competition. Producers who invested based on earlier restrictions may now face losses.
Consequences of Hasty QCO Expansion and Abrupt Rollback
- Industrial Uncertainty: Constant changes in standards have created a climate of unpredictability, discouraging long-term industry planning.
- Weakening of Domestic Competitiveness: Poorly designed QCOs increased input costs, affecting export competitiveness and reducing India’s participation in global value chains.
- Loss of Credibility: Frequent policy reversals weaken India’s reputation as a predictable investment destination.
- Burden on MSMEs: MSMEs bore the brunt of certification delays, higher costs, and disrupted supply chains.
- Potential Surge in Low-Quality Imports: Abrupt removal of QCOs without alternative checks opens the possibility of dumping of low-quality or underpriced goods.
Way Forward for Rational and Effective Use of QCOs
- Gradual and Predictable Implementation: Mandatory standards should be introduced with sufficient transition time, especially for upstream raw materials.
- Strengthening BIS Capacity: BIS must expand its testing facilities, digital processes, and audit infrastructure to ensure timely, consistent approvals.
- Consultation with Industry: Stakeholder consultations should be mandatory before imposing or removing a QCO, particularly in critical value chains.
- Risk-Based Regulation: Instead of blanket QCOs, India should prioritise safety-critical and strategically sensitive sectors.
- Aligning Standards With Global Norms: Adopting internationally harmonised standards will reduce compliance burdens and increase export competitiveness.
- Alternative Tools to Prevent Dumping: Anti-dumping duties, safeguard duties, and tariff calibration can be used to protect domestic industry without relying on mandatory certification.
Conclusion: The rollback of QCOs was necessary because their rapid expansion created severe supply chain disruptions, compliance burdens, and trade friction. However, the hasty removal of QCOs without adequate safeguards risks reversing earlier gains and exposing domestic industries to cheap imports. A balanced industrial policy requires predictable regulation, strong institutional capacity, and a phased approach, ensuring that India’s quality ecosystem evolves without harming competitiveness or supply chains.
Question: What do the recent rollbacks of Quality Control Orders (QCOs) reveal about India’s regulatory and industrial policy challenges? Discuss.
