India’s Quality Control Orders: Understanding Key Trends

The global economy is undergoing rapid shifts, with one of the key drivers being the uncertainty surrounding U.S. tariff policy. What role can India play in navigating these developments?

While the government is working on short- to medium-term responses, India must, in the long run, focus on reforming its manufacturing sector to ensure global competitiveness. As highlighted in a recent CSEP study, India continues to lag behind its Asian peers in manufacturing competitiveness (Prabhakar et al., 2025). One of the critical reasons for this gap is India’s relatively high tariff barriers. As of 2024, the average tariff on non-agricultural goods in India stood at 13%, compared to significantly lower rates in China (6.5%), Malaysia (5.3%), and Vietnam (8.3%). These tariffs, combined with structural constraints, have adversely affected India’s ability to compete in global markets.

India’s protectionist approach has intensified in recent years. Tariffs began to rise sharply in 2018 and were reinforced in 2020 with restrictions on Chinese investments, along with the sustained use of anti-dumping duties to curb the inflow of cheap imports.

In parallel, the government has significantly expanded the use of Quality Control Orders (QCOs), especially since 2020. While these orders are designed by respective line ministries, their enforcement lies with the Bureau of Indian Standards (BIS). QCOs apply to both domestic producers and importers, although certain exemptions are provided for imports meant for re-exports. These orders mandate compliance with specific product standards, with consignments subject to testing. Based on the results, BIS issues certifications to producers or importers.

Although QCOs are intended to strengthen India’s manufacturing ecosystem, they have also generated supply chain disruptions

Although QCOs are intended to strengthen India’s manufacturing ecosystem, they have also generated supply chain disruptions. Certification delays, particularly affecting suppliers of critical components, have increased lead times for manufacturers and exporters. Lengthy testing procedures add further strain to production schedules.

A key challenge in evaluating QCOs has been the lack of systematic mapping between QCO regulations and their corresponding Harmonized System (HS) codes. To address this gap, an exercise was undertaken to map QCOs to unique HS codes. Drawing on this newly developed database, this blog provides a snapshot of key QCO trends.

Growth in QCOs over years 

As of December 2024, India had implemented 765 QCOs—up sharply from just 88 in 2019

As of December 2024, India had implemented 765 QCOs—up sharply from just 88 in 2019 (Figure 1). This surge in QCOs has unfolded alongside a broader shift in India’s trade and investment policy landscape. Since 2017, tariff levels have risen significantly, climbing from 13.5% in 2017 to 17.1% in 2018. In 2020, restrictions were introduced on Foreign Direct Investment (FDI) from China, followed by a sharp decline in overall FDI inflows—from a peak of US$ 64.4 billion in 2020 to just US$ 28.1 billion in 2023. In parallel, the government rolled out the Production Linked Incentive (PLI) schemes.

Taken together, these measures reflect a deliberate policy shift away from import dependence and toward strengthening self-sufficiency in manufacturing, both to meet domestic demand and to build competitiveness in foreign markets.

Figure 1: Growth in India’s QCOs

Source: Author’s analysis based on Goyal and Goyal (2025).

Sectoral Decomposition of QCOs 

A sectoral analysis of QCOs shows that metals, machinery and electronics, textiles, chemicals, plastics and rubber, and footwear are among the most affected industries

A sectoral analysis of QCOs shows that metals, machinery and electronics, textiles, chemicals, plastics and rubber, and footwear are among the most affected industries (Figure 2). 

Notably, sectors with a high incidence of QCOs also tend to display significant firm concentration. Acharya and Chauhan (2023) report that as of 2021, the top five business groups accounted for 68% of total assets in the Manufacture of Basic Metals sector and 26% in the Manufacture of Chemicals. This concentration, combined with the prevalence of QCOs, suggests a strong overlap between sectors with greater market power and those subject to more stringent regulatory measures.

Figure 2: Sectoral Composition of QCOs (Per Cent), 1987–2025

Source: Author’s analysis based on Goyal and Goyal (2025).

QCO decomposition across the category of goods

Majority of QCOs apply to intermediate goods (45.7%), raising concerns about potential disruptions to domestic supply chains

Notably, the majority of QCOs apply to intermediate goods (45.7%), raising concerns about potential disruptions to domestic supply chains (Figure 3). For instance, viscose staple fibres—widely used in synthetic garment production—and steel fasteners—critical inputs in the automotive industry—are both covered under QCOs. Such measures risk exacerbating existing challenges to India’s manufacturing competitiveness, an area where the country already lags behind its peers (Prabhakar et al., 2025).

Figure 3: Distribution of QCOs Across Supply Chain Stages

Source: Author’s analysis based on Goyal and Goyal (2025).

Key Takeaways and Road Ahead 

Overall, the assessment of the QCO database reveals a sharp surge in its imposition by line ministries and the Bureau of Indian Standards (BIS). This expansion has coincided with broader policy shifts toward import protection and self-reliance. The sectors most affected by QCOs are also those characterised by a high concentration of market power and domination by large firms. Most importantly, QCOs are concentrated in intermediate and capital goods—the backbone of domestic supply chains. This poses significant risks to the competitiveness of India’s industrial output.

Given these trends, it is important to adopt a calibrated approach to QCO implementation, particularly in the selection of products brought under these orders. QCOs should be imposed strictly on quality-related grounds, and not for protectionist purposes—especially in the case of capital and intermediate goods that are not produced in sufficient quantities within India.

At the same time, compliance procedures need to be streamlined to ease the burden on Micro, Small, and Medium Enterprises (MSMEs), which often face significant challenges in meeting complex certification requirements. Finally, regulatory bodies should carefully monitor the potential for QCOs to create pricing power and reinforce concentration in already concentrated sectors, thereby limiting adverse effects on competition in the Indian industry.