In a significant policy shift that promises to reshape India's manufacturing landscape, the central government has withdrawn quality control orders on a wide range of polyester and petrochemical inputs. This decision brings substantial relief to downstream user industries, particularly micro, small and medium enterprises that have been grappling with high input costs.
Policy Shift Brings Cost Relief
The withdrawal of Quality Control Orders issued by the Bureau of Indian Standards will make raw materials more accessible for manufacturers of textiles, PVC products, apparel, and footwear. While QCOs ensure product quality, they also increase costs that ultimately cascade down to industries using these raw materials as inputs.
The decision follows recommendations from a Niti Aayog committee led by former cabinet secretary Rajiv Gauba, which highlighted how these quality norms were raising costs for MSMEs that import these materials in large quantities. The order was officially issued by the department of chemicals and petrochemicals.
Mixed Impact on Industry Players
While user industries welcome the move, domestic manufacturers of these raw materials face increased competition from imports. Major producers like Reliance Industries Ltd, Indian Oil Corp. Ltd, and Aditya Birla Group companies Grasim and Thai Acrylic Fibre may see their market position challenged by cheaper imported alternatives.
A Reliance Industries spokesperson stated that the company has always priced its products with the long-term growth of the textile industry in mind. "We welcome the decision of the government, and we will continue to stay competitive offering the best quality products to the downstream industry for domestic and value-added export market," the spokesperson said.
Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India, confirmed that the withdrawal fulfills a long-standing wish of the MSME industry and will significantly benefit textile makers.
Import Dependency and Global Sourcing
India remains heavily dependent on imports for several critical chemical inputs. The raw materials now freed from QCO requirements include:
- PTA and MEG - key polyester components primarily sourced from China, South Korea, Thailand, Indonesia, Malaysia, and Taiwan
- Polypropylene and polyethylene materials from Saudi Arabia, UAE, Singapore, South Korea and China
- PVC homopolymers, ABS, EVA copolymers from China, South Korea, Taiwan, Thailand, Japan and Gulf producers
According to data presented to Parliament, India imported 57.38 million metric tonnes of chemicals and petrochemicals valued at ₹6.3 trillion in 2024-25. Despite recent domestic capacity expansion, the country's reliance on imported raw materials remains substantial.
Vinod Kumar, president of the India SME Forum, emphasized that this decision provides much-needed breathing space for SMEs struggling with rising input costs, uncertain supply lines, and compliance burdens.
Broader Implications and Industry Response
The policy reversal marks a significant departure from the government's original plan to expand the QCO regime to cover more products. With the withdrawal of 14 products from quality control requirements, a total of 744 products now remain regulated through Quality Control Orders.
Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry, described the decision as "a great relief and long-awaited demand of all user industries." He noted that easier access to raw materials at globally competitive prices would improve cost competitiveness and, combined with the export package announced on 12 November, serve as a huge confidence-booster for the textile and apparel sector.
Trade economist Abhash Kumar from Delhi University observed that this move represents a change in India's approach to quality regulation for industrial raw materials. "For many mid-sized manufacturers, the issue was never about resisting standards but about the pace and practicality of implementing them," he explained.
Rajeev Gupta, joint managing director of RSWM Ltd, pointed out that while the move will benefit downstream industries, synthetic and grey yarn spinners might face pressure from imported yarn. However, he acknowledged that cheaper and more easily available raw materials would strengthen India's position in global markets for man-made fibre textiles.
The withdrawal of QCOs continues a trend that began on 23 July when the government removed quality controls for three key industrial chemicals—acetic acid, methanol and aniline. This policy direction contrasts with earlier plans to bring over 700 more products under QCOs in FY26.
