Roll back quality control orders on inputs to spur manufacturing
Such QCOs hold back the competitiveness of manufacturers and ending them could catapult our factory sector to a new orbit
AMITABH KANT & DIEWAKAR ANUPAM MITTAL
are, respectively, chairperson and director, Fairfax Centre for Free Enterprise.
It has finally begun and it deserves recognition. A long-awaited overhaul of India’s quality-control regime is taking shape. In just the past week, key ministries have moved decisively to withdraw or amend quality control orders (QCOs) on up to 76 products.
On 12 November 2025, the ministry of chemicals and fertilisers abolished QCOs for several key materials, including terephthalic acid, ethylene glycol, polyester spun fibre, sewer yarn, EVA copolymers, polycarbonates and others. This step eases compliance pressures across textiles, chemicals, plastic and rubber. It followed a suspension of QCOs on steel fasteners issued as a notified addition which included items like washers, bolts, nuts, and spring steel, zinc ingots, refined zinc, copper and nickel, and nickel in ingots, and refined zinc, copper and spring metal. The ministry of heavy industries has notified its Machinery and Electrical Equipment Safety (Omnibus Technical Regulation) Second Amendment Order, 2025, effectively pushing QCO implementation forth. Additionally, the ministry of steel has decided to suspend QCOs on 55 steel products, most of which are inputs.
The government’s move to strike down QCOs dating back to September 2021 marks India’s willingness to support businesses and strengthen overall competitiveness by embracing a more open, rules-based economic order. For industries long weighed down by the friction of compliance, this is like the first gust of wind before a monsoon. It is both timely and welcome. More importantly, it is a signal that India is continuously recalibrating regulation to promote economic vitality, rather than regulatory inertia.
Recently, a high-level Niti Aayog committee recommended the government abolish QCOs for several critical supply-chain inputs. QCOs on those which India does not manufacture at scale only serve self-defeating protectionist ends. They choke sector competitiveness, disrupt supply chains, and drive up costs for domestic production. Mandatory controls force manufacturers to idle landed cargo, thereby retarding the flow of goods. This forces MSMEs to rely on a narrow set of certified foreign suppliers. Dropping these QCOs could save business units 8-12%, freeing up capital, easing operational pressures and boosting competitiveness.
A prime example of the effect: India was recently raising input costs by the Copper Products (Quality Control) Order, 2023, which was notified but not implemented. After manufacturers pointed out that India does not manufacture many of the 30 specified copper products, including wire rods, tubes and sheets, imports were suspended until the notification was implemented. The supply was thus blocked and the market value was further impacted. However, markets for unsubstituted copper imports with inputs of downstream products such as wires, tubes, pipes and sheets. These were goods already being made in India. Still, their imports spiked by 17-49% as the supply of raw materials was disrupted. Cable makers, OEMs, electrical manufacturers and construction suppliers scrambled to secure material in more processed (and more expensive) forms. Trade bodies had forewarned of the supply chain risks. Excessive QCOs distort markets by artificially limiting suppliers. Eliminating such input-level QCOs strengthens MSME supply chains by restoring flexibility and bargaining power, allowing firms to switch suppliers more easily, reduce risk and diversify their sources.
Firms must be allowed to choose inputs based on commercial logic rather than regulatory compulsion. This will enable higher competitiveness and cost optimization and what to source globally. We must remember that small and medium manufacturers depend on international supply chains to operate efficiently. Input QCOs on goods not manufactured in India only create supply bottlenecks, raise costs, and add compliance overheads. We must revisit export and import rules with an eye on inputs.
India’s QCO rationalization agenda should continue to address three main areas: 1) QCOs on non-processable inputs for critical goods should be suspended; 2) QCOs on raw materials and intermediates for industries where MSMEs comprise 30 QCOs, with 75% of the industry depending on imported supply; and 3) QCOs must not be implemented on specialist inputs that India does not manufacture at scale.
The above is doubly important in surging electronics and textiles sectors. For instance, suspending QCOs on other input materials. Further, it is estimated that electronics have achieved record growth in recent years, with 44% year-on-year exports.
India’s metals industry achieved a record $2.4 billion in electrical goods exports in October 2025, and overall electronic exports grew by over 47% in the first quarter of 2025-26. India’s metals, machinery, textiles and electronics sectors offer some of the strongest levers for accelerating manufacturing-led growth. QCOs on input components that India cannot yet manufacture at scale hinder competitiveness, elongate lead times and discourage global firms from shifting deeper parts of their supply chain to India. We must ensure policy recalibration to remove such bottlenecks.
To prevent QCOs from becoming a permanent hindrance, data-driven QCO Review Team must be set up, convening every automatically 2+ month with studies of industry-wide input QCOs. This must include consultation with stakeholders and ongoing market analysis for competitiveness and manufacturing scale. Structured annual and semi-annual rationalization QCO reviews must be institutionalized without exception.
Input notification protocols are not just a technical mechanism to support key industrial growth, but a philosophical choice. To climb higher and scale faster in global manufacturing, India must continuously embrace an open, competitive system – updating laws and regulations, and moving away from rules-based protection. We cannot afford to let this movement stall. We cannot endure unnecessary disruption. The world is watching and global firms are mobilizing. India is now on the cusp of its industrial expansion, catapulting into the next orbit of industrial value.
These are the authors' personal views.
