Key Takeaways
- Government relaxes Quality Control Order (QCO) requirements for raw materials and steel products.
- Move aims to ease pressure on domestic industry facing high input costs and US tariffs.
- Steel import QCO exemption extended until March 31, 2026.
- Textile sector welcomes decision while steel industry raises dumping concerns.
The Indian government has eased Quality Control Order (QCO) mandates for several raw materials and intermediate goods, providing relief to domestic manufacturers struggling with high input costs and US tariff pressures.
Following earlier relaxations for 14 petrochemicals and polymer intermediates, the government has now extended QCO exemptions for specified steel products. The steel ministry has pushed the compliance deadline for imports with a Bill of Lading from October 2025 to March 31, 2026.
Why the Policy Shift?
Experts indicate the government was compelled to relax quality norms due to the dual challenge of elevated raw material costs and US tariff barriers.
“The QCO was introduced to address the risk of dumping poor-quality goods and inputs. However, it has resulted in unintended consequences for domestic manufacturers, including higher input costs and delays in sourcing. These issues have been exacerbated by tariff challenges,” said Ranen Banerjee, Partner and Economic Advisory Leader, PwC India.
A Quality Control Order requires specific products to meet Indian standards and obtain a Bureau of Indian Standards (BIS) licence for manufacturing, sale, or import.
International Pressure and Domestic Advice
The policy review coincides with pressure from Washington, where the Trump administration has imposed penalties on Indian exports. The US Trade Representative’s 2025 report identified India’s QCO regime as a major non-tariff barrier.
“The United States has concerns that BIS standards are not fully aligned with international standards without demonstrating that they would be ineffective or inappropriate,” the report stated.
Additionally, a NITI Aayog panel has recommended pausing upcoming QCOs for raw materials and capital goods, suggesting new mandates should only apply to products with direct safety or environmental risks.
Mixed Industry Response
The textile and apparel sector has welcomed the relaxation, noting it will improve global competitiveness through access to cheaper raw materials.
“Viscose staple fibre and several speciality fibres are critical inputs for value-added garments and made-ups. This, along with the earlier withdrawal of QCOs on polyester yarn and fibres, will address price and availability concerns raised by users in the man-made fibre segment,” said Ashwin Chandran, Chairman, Confederation of Indian Textile Industry (CITI).
However, steel manufacturers have raised concerns about potential dumping from countries like China, fearing predatory pricing could harm domestic producers. Stainless steel exporters are scheduled to meet government officials next week to discuss these issues.
