QCOs on 14 Key Raw Materials
for Polymers Removed under Trump Tariff Pressures, RIL and IPCL Affected
Rescind
the Fourteen notifications of
1. Terephthalic
Acid (PTA)
2. Ethylene
Glycol (EG)
3. 100%
Polyester Spun Yarn (Grey & White)
4. Polyester
Industrial Yarn (IDY)
5. Polyester
Staple Fibres (PSF)
6. Polyester
Continuous Filament Fully Drawn Yarn
7. Polyester
Partially Oriented Yarn (POY)
8. Polyethylene
Material for Moulding and Extrusion
9. Acrylonitrile-Butadiene-Styrene
(ABS)
10. Polypropylene
(PP) Material for Moulding and Extrusion
11. Polyvinyl
Chloride (PVC) Homopolymers
12. Ethylene-Vinyl
Acetate Copolymers (EVA)
13. Polyurethanes
14. Polycarbonate
(PC)
What Happened?
·
On
November 13, India scrapped mandatory BIS (Bureau of Indian Standards)
certification—the QCO regime—for 14 products under Chemicals &
Petrochemicals and 6 under Mines.
o
Affected
products: Major industrial raw materials like PTA, MEG, polyester fibres,
polypropylene, polyethylene, PVC resin, ABS, polycarbonate, aluminium, lead,
nickel, tin, and zinc.
Why?
·
QCOs had
ballooned from less than 70 a decade ago to about 790, driven in part by
administrative expansion rather than product safety.
·
Many QCOs
affected raw materials without direct safety implications but caused
costs, delays, and sourcing headaches—especially for MSMEs (Micro, Small, and
Medium Enterprises).
Immediate Impact
·
Manufacturers,
especially MSMEs, get relief: No more
delays at BIS labs, port bottlenecks, or extra demurrage.
o
Key
textile centers (Surat, Ludhiana, Tiruppur,
Bhilwara) and plastics processors are major beneficiaries.
·
Exporters
benefit: Easier
access to globally certified intermediates boosts competitiveness in technical
textiles, plastics, engineering goods, and synthetic garments.
·
Supply
flexibility restored for key
metals, helping downstream sectors like auto components, batteries,
electronics, construction, and defence where domestic production is limited
(e.g., India makes no primary nickel).
Industry and GTRI Response
·
Industry
welcomes move but calls for similar reforms in steel and other product lines
where QCOs still distort supply and pricing.
o
Issues
remain in segments like stainless steel flats and specialized hardware
(fasteners, hinges, telescopic channels).
·
The
Global Trade Research Initiative (GTRI) warns that without QCOs, India must vigilantly
monitor imports to prevent dumping of substandard or surplus goods.
o
If unfair
import surges are detected, India may need to rely on anti-dumping duties,
safeguards, or tariff-rate quotas.
Strategic Takeaways
·
This
rollback signals a globally-aligned, risk-based approach: only apply
mandatory certification when it adds safety, not friction.
·
Effective
surveillance and responsive trade measures will be key to protecting MSMEs and ensuring fair competition.
India’s
move to scrap Quality Control Orders (QCOs) on a wide basket of raw materials across
textiles, plastics and mining has brought immediate relief to manufacturers, even
as the Global Trade Research Initiative (GTRI) has urged the government to keep
a tight watch on possible import surges, ANI reported.
The
withdrawal, notified on November 13, eliminates mandatory BIS certification for
14 products under the Chemicals & Petrochemicals Ministry and six under the
Mines Ministry. The list includes widely used inputs such as PTA, MEG, polyester
fibres, polypropylene, polyethylene, PVC resin, ABS, polycarbonate, and metals such
as aluminium, lead, nickel, tin and zinc.
The
reforms flow from the Gauba Committee’s findings, which noted that QCOs grew from
fewer than 70 a decade ago to nearly 790, many covering raw materials without direct
safety implications. Industry groups had long argued that mandatory certification
on industrial inputs created delays, raised costs and often did not enhance product
quality.
According
to GTRI, the rollback will immediately ease sourcing pressures in textile hubs like
Surat, Ludhiana, Tiruppur and Bhilwara, and among plastics
processors, nearly 90% of whom are MSMEs. Earlier requirements led to long queues
at BIS labs, port detentions and demurrage charges, frequently crippling small units.
Exporters
are also expected to benefit as easier access to globally certified intermediates
improves competitiveness in technical textiles, moulded plastics, engineering goods
and synthetic garments.
The
withdrawal of QCOs for metals such as aluminium, zinc, lead, nickel and tin restores
supply flexibility for downstream sectors including auto components, electronics,
batteries, construction and defence. India has no primary nickel production, and
limited domestic output in several specialised grades, meaning the earlier regime
risked choking critical imports.
That
relief, however, comes with a caution. GTRI says MSMEs are now looking for similar
reforms in steel, where QCOs continue to distort availability and pricing. In stainless-steel
flats, for example, domestic capacity remains inadequate, while foreign suppliers
stay away from BIS certification due to cost and scale constraints. Other product
lines — including fasteners, auto hinges and telescopic channels — face comparable
bottlenecks, with small manufacturers alleging that current rules favour a handful
of large players.
GTRI
also flags the need for “daily monitoring” of import trends to prevent the absence
of QCOs from becoming an opportunity for dumping low-grade or excess stocks into
India. If injury is detected, policymakers may need to rely on anti-dumping duties,
safeguard actions or tariff-rate measures to protect domestic producers.
The
think-tank added that while the government’s decision marks a major, globally aligned
shift — removing QCOs where they add friction rather than safety — strong surveillance
architecture will be essential to ensure MSMEs remain shielded and competition stays
fair.