As the Union government plans another round of relaxations of Quality Control Orders (QCOs), experts and industry leaders expect a permanent overhaul of the system, rather than piecemeal changes. Only a comprehensive review of the current set of QCOs will allow the reforms to have the required deregulation impact on businesses, they argue.
The push comes after Commerce and Industry Minister Piyush Goyal, during a recent visit to Japan, signalled that the government is considering industry-specific, product-based, project-based, or company-based exemptions from mandatory QCOs to support high-tech manufacturing.
Trade experts argue that the core flaw in India’s regulatory approach is applying mandatory quality standards to intermediate goods, capital equipment, and raw materials rather than focusing strictly on consumer-facing products with high safety, health, or environmental risks. Overregulation and redundant supervision impose a heavy compliance burden on industries.
Industry executives also stress the need for exemptions for specialised semiconductor equipment, as these machines are already deployed globally and carry recognised certifications.
A survey by the Japan External Trade Organisation (JETRO) revealed that nearly 72% of Japanese manufacturers operating in India reported that Bureau of Indian Standards (BIS) certifications have impacted or are expected to affect their operations. The figure jumped to 92.3% for general-machinery firms and 76.8% for transportation-equipment makers, with most describing the impact as “serious” or “very serious.”
A recent report by the High Level Committee on Non-Financial Regulatory Reforms headed by former Cabinet Secretary Rajiv Gauba acknowledged that a significant number of QCOs apply to inputs feeding into downstream production—a stance at odds with international standards. The report did lead to relaxation of QCOs in the steel sector and alternate compliance routes in sectors like toys, Personal Protective Equipment (PPE), air conditioners, compressors, footwear, furniture, hinges, and domestic electrical appliances. However, the larger question raised by it remained unanswered.
An industry executive said QCOs are difficult to navigate because the same component can be classified as a finished product in one industry but used as an intermediate input in another. This creates complications for companies importing components for use in new semiconductor plants, EV factories, railway systems, High Voltage Direct Current projects and other advanced manufacturing facilities
“The issue is not about BIS certification; it is about the uncertainty, time and duplication involved. These specialised semiconductor manufacturing equipment already meet globally accepted standards for safety, quality and reliability, and carry certifications recognised worldwide. The government should therefore consider risk-based exemptions and a fast-track mechanism for such equipment,” President, India Electronics and Semiconductor Association (IESA) Ashok Chandak said.
Proliferation of QCOs
According to research by Prerna Prabhakar, a fellow at the Centre of Social and Economic Progress (CSEP), QCOs surged from 88 in 2019 to a peak of 790 last year before recent relaxations brought the count down to roughly 600. The increase came without a corresponding increase in testing infrastructure.
Most of these 600 products are intermediate goods, inputs and capital goods and some of the products that have been given relaxation would still require some kind of government approval for imports, she said.
An analysis by Prabhakar showed that 40% of QCOs are in the metal sector, 21% in machinery and electronics, 9.2% in textiles, 6.8% in chemicals and 5.6% in plastic or rubber. Majority of QCOs apply to intermediate goods (45.7%), raising concerns about potential disruptions to domestic supply chains.
To reform the system, Ayush A. Mehrotra, Partner at Khaitan & Co, suggested either rescinding unnecessary QCOs or rationalizing their scope to focus on finished consumer products. He also recommended subjecting proposed QCOs to risk-based assessments by an Inter-Ministerial Group (IMG), rather than leaving decisions solely to sectoral ministries, to better evaluate their impact on manufacturing costs and supply chains.
Industry representatives argue that such an approach could prevent ministries from imposing certification requirements without adequately assessing their impact on manufacturing costs, imports and supply chains.
Specialised semiconductor equipment such as lithography, deposition, etching, cleaning, metrology and inspection systems could be considered for risk-based waivers, as these machines are already deployed globally and carry recognised certifications,” Chandak said.
However, another industry expert warned that broadly diluting QCOs could harm the domestic ecosystem. Local companies that invested heavily in R&D, manufacturing, and testing labs to meet these standards would face unfair competition from cheaper imports, ultimately discouraging further domestic investment and deepening import reliance.
High-Tech and MSMEs Bear the Brunt
High-tech sectors—including electronics, medical devices, automotive components, robotics, and telecom—rely on specialized, low-volume global inputs, making them the fiercest critics of QCO protocols. Foreign suppliers often refuse mandatory BIS physical factory audits and high certification fees, especially when India represents a minor market share.
According to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), these open-ended procedures risk turning quality assurance into a costly licensing regime. He cited a Vietnamese screw manufacturer that spent ₹60 lakh on testing and inspections but still awaits a final decision after over a year.
While large OEMs can navigate these delays, MSMEs are hit hardest by mounting compliance costs, mandatory in-house testing labs, and 6–12 month wait times. Srivastava questioned imposing such heavy burdens on non-hazardous MSME products like footwear and furniture, which carry negligible safety risks.