Rethink on quality control orders is timely, Pg12

Key Highlights:

• The government is rethinking the expansion of Quality Control Orders (QCOs) due to concerns about their impact on competitiveness.
• As of March 2025, 187 QCOs covering 769 products had been notified, affecting sectors like textiles, machinery, electronics, and metals.
• The Ministry of Chemicals and Fertilisers revoked QCOs on 14 items, and the Ministry of Mines revoked 7 QCOs on minerals.
• A NITI Aayog report noted that QCOs have negatively affected the competitiveness of export and employment-oriented sectors.

Detailed Insights:

• QCOs, intended to ensure quality, have increased compliance burdens, raised input costs, and acted as trade barriers, especially for smaller firms.
• Enforcement of standards on raw materials and capital goods has led to operational difficulties, prompting recommendations for revocation, suspension, and deferment of orders.
• A study indicates that while QCOs decrease imports, they do not lead to long-term export gains, conflicting with the goal of global supply chain integration.
• The government's move to lower tariff barriers and pursue free trade agreements should be complemented by dismantling non-tariff barriers like QCOs.

Key Concepts Involved:

• Quality Control Orders (QCOs): Mandates that ensure products meet specific quality standards through certification and regulatory processes.
• Non-Tariff Barriers: Trade restrictions that are not tariffs, such as quotas, embargoes, sanctions, and sometimes include stringent standards and regulations.
• Global Supply Chains: International networks connecting companies and resources used to produce and distribute goods and services worldwide.