Govt should cap charges of product testing under quality control order: GTRI
High testing and certification costs for Quality Control Orders (QCOs) are pushing many MSME importers out of business, according to GTRI. The think tank urged the government to cap testing charges and recognize foreign lab reports to support the 'Make in India' initiative and prevent market domination by large importers.
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Context
The Global Trade Research Initiative (GTRI) has urged the government to cap testing charges for industrial products under India's expanding Quality Control Orders (QCOs). High compliance costs and stringent certification processes under the are currently creating severe operational bottlenecks for MSMEs and inadvertently undermining the initiative.
UPSC Perspectives
Economic
The widespread application of has a disproportionate impact on Micro, Small, and Medium Enterprises (MSMEs). QCOs mandate adherence to specific quality norms, requiring foreign suppliers to undergo testing and certification under the . Upfront certification expenses running into Rs 15-20 lakh act as a massive barrier to entry. While large corporations can absorb these costs through economies of scale, smaller firms importing low-volume or highly specialized inputs cannot. This dynamic risks pushing MSME importers out of business, leading to market monopolization by large players. Furthermore, it disrupts Global Value Chains by making critical imported components unaffordable for small domestic manufacturers.
Governance
From a regulatory standpoint, are essential tools designed to ensure consumer safety, standardise products, and restrict the influx of sub-standard goods (often acting as a quality check against cheap imports from countries like China). However, the implementation pace has outstripped the capacity of domestic testing infrastructure. Foreign manufacturers must appoint Indian representatives, undergo factory inspections, and use BIS-approved labs. To resolve these governance bottlenecks, experts recommend adopting risk-based testing norms rather than universal excessive sampling. Additionally, recognizing testing reports from accredited foreign laboratories and conducting a formal Regulatory Impact Assessment before notifying new QCOs would greatly improve the Ease of Doing Business.
Strategic
Strategically, the current testing regime poses a paradox for the initiative. While QCOs act as Non-Tariff Barriers (trade restrictions that do not take the form of tariffs or taxes) intended to protect and encourage domestic manufacturing, they inadvertently harm it. Many advanced Indian manufacturers rely heavily on imported, specialized inputs, components, and machinery that are simply not produced locally at the required quality or scale. If the import of these essential raw materials becomes commercially unviable due to high compliance costs, India's overall manufacturing competitiveness and export potential will suffer. A balanced policy approach is needed to protect domestic consumers without strangling domestic industrial capacity.