Think Tank GTRI Urges Comprehensive Review of Quality Control Orders for Enhanced Standards

The Global Trade Research Initiative (GTRI) has called for a reassessment of the Quality Control Orders (QCOs) implemented in India, emphasizing that while these regulations aim to protect consumers, they may unintentionally serve as barriers to trade and increase costs for manufacturers, particularly micro, small, and medium enterprises (MSMEs). GTRI Founder Ajay Srivastava pointed out that the mandatory quality certification requirements would not only elevate production costs but also pose challenges for Indian exporters who may face additional certification requirements in other countries, leading to delays and increased logistical expenses.

This situation means that the average citizen could see higher prices on goods, as manufacturers may pass on increased compliance costs to consumers. For the market, particularly in the MSME sector, the constraints imposed by QCOs could stifle growth and innovation, limiting the competitive edge of Indian products both domestically and internationally. The apprehensions expressed by Japanese manufacturers about the QCO system have significant implications, as they suggest that foreign investments may be deterred, which is contrary to the “Make in India” initiative aimed at boosting local manufacturing.

Moving forward, it is crucial for the government and the Reserve Bank of India (RBI) to address these concerns through a comprehensive review of the QCO framework, as indicated by Commerce and Industry Minister Piyush Goyal. A strategic reevaluation could lead to the easing of mandatory certifications for high-technology sectors, providing immediate relief and potentially laying the groundwork for broader reforms. Such initiatives may enhance the investment climate, stabilize supply chains, and ultimately support the growth of manufacturing in India, fostering a more competitive environment in the global market.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)