Transition Facilitation (Quality Control) Order, 2026
The Union government has introduced the Transition Facilitation (Quality Control) Order, 2026, which aims to address issues in India's "quality control order" (QCO) regime that affect business and supply chains, especially in the manufacturing sector.
Key Features of the New Framework
- Manufacturers in sectors such as toys, footwear, air-conditioners, furniture, and washing machines can source products through a risk-based compliance mechanism instead of certification by the Bureau of Indian Standards (BIS).
- Companies with a proven compliance record and strong quality systems can obtain permission through a government committee while meeting Indian standards.
- The goal is to ease supply bottlenecks without compromising quality.
Challenges with the Existing QCO Regime
- The original purpose of QCOs was to protect consumers, improve product quality, and prevent substandard imports.
- QCOs have expanded from 100 products in 2014 to over 650 product categories, affecting raw materials and manufacturing supply chains.
- Manufacturers face challenges as overseas suppliers require BIS certification, leading to slow, expensive, and uncertain processes.
- The regime disproportionately affects micro, small, and medium enterprises, hindering their integration into global value chains.
- QCOs are perceived as non-tariff barriers; imports of covered products declined by about 24%, but exports did not improve.
Government Review and Recommendations
- A study showed that the QCO regime increased compliance costs without boosting export competitiveness.
- A high-level committee recommended the deferment of over 200 QCOs due to their disruptive impact on supply chains.
- Approximately 76 orders had been suspended as of November 2025, yet reforms remain limited.
Suggested Reforms
- The selective exemption mechanism increases uncertainty and friction akin to the "licence raj" system.
- Licences under the new system are initially valid for two years and may be renewed, adding to the uncertainty.
- A comprehensive review of the QCO regime is needed to objectively assess costs and benefits.
- Mandatory QCOs should focus on products affecting consumer health and safety.
- Industrial inputs should be governed through transparent, risk-based standards with strict penalties for violations.
