In a significant policy shift, the Indian government has begun revoking several Quality Control Orders (QCOs) that had raised concerns about their impact on trade competitiveness and manufacturing costs. This move comes after extensive studies and industry feedback highlighted the negative consequences of an expanding quality control regime.
The Scale of Quality Control Expansion
The rapid expansion of Quality Control Orders had reached substantial proportions by March 2025. 187 QCOs covering 769 products had been officially notified for certification, creating regulatory burdens across multiple sectors. The effects were particularly pronounced in textiles, machinery, electronics, and metals industries where compliance requirements increased operational complexity.
Earlier this year, the Confederation of Indian Textile Industry had voiced serious concerns, noting that QCOs applied to raw materials and inputs were creating sourcing difficulties that undermined competitiveness. This feedback was later reinforced by a NITI Aayog report that documented how these quality controls were affecting export-oriented sectors and employment-heavy industries.
Government Takes Corrective Action
In response to these concerns, the government has initiated a rollback of selected QCOs. The Ministry of Chemicals and Fertilisers took the lead by revoking QCOs on 14 items, including critical chemical intermediaries that play vital roles in the textile value chain. Shortly afterward, the Ministry of Mines followed suit by withdrawing seven QCOs covering essential minerals such as nickel, copper, and aluminium.
This policy correction addresses what many experts had identified as a fundamental contradiction. While QCOs are designed to ensure product quality, they simultaneously function as non-tariff trade barriers that increase compliance costs and input expenses. The problem becomes particularly acute in sectors where domestic alternatives are limited or non-existent.
Disproportionate Impact and Research Findings
The burden of QCO compliance falls unevenly across the business landscape. Smaller firms face disproportionate challenges in navigating the bureaucratic labyrinth, while larger enterprises with dedicated compliance teams often benefit from the reduced competition. This dynamic runs counter to the government's objectives of supporting MSMEs and promoting inclusive growth.
Research from the Centre for Social and Economic Progress provides compelling evidence about the economic impact of QCOs. Their study demonstrates that while these quality controls do lead to reduced imports, they fail to generate long-term export gains. This finding challenges the assumption that quality restrictions automatically translate into competitive advantages in global markets.
The NITI Aayog study further reinforced these concerns, noting that enforcing standards on raw materials and capital goods had created operational difficulties for companies. The government think tank subsequently recommended the revocation, suspension, or deferment of QCOs in various categories to restore competitiveness.
Aligning Trade Policy with Global Integration
This recalibration of quality control measures comes at a crucial time for India's trade policy. The country has been actively pursuing lower tariff barriers and negotiating free trade agreements to deepen its integration with global supply chains. However, the proliferation of non-tariff barriers like QCOs created a policy inconsistency that potentially undermined these broader strategic objectives.
The recent revocations signal a more balanced approach to quality regulation—one that maintains necessary standards while avoiding unnecessary trade restrictions. As India continues its push for greater global economic engagement, aligning domestic regulations with international trade objectives becomes increasingly important for sustainable export growth and manufacturing competitiveness.
