Imposition of QCOs on polyester and viscose has led to a decline in production capacity and financial losses.
Downstream synthetic textile manufacturers have urged the government to reconsider Quality Control Orders (QCOs) on man-made fibres (MMF), citing that these regulations have harmed the competitiveness of the MMF supply chain. They argue that QCOs, which require Bureau of Indian Standards (BIS) certification for imported polyester and viscose inputs, have led to higher costs and limited access to specialised raw materials, exacerbating challenges already faced by the sector.
Industry representatives highlight that the imposition of QCOs on polyester and viscose has led to a decline in production capacity and financial losses. According to them, the primary issue lies in the increased cost of raw materials within India compared to global markets, which adversely affects export competitiveness.
Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), expressed concerns over the impact on exports, stating, “We are unable to procure our raw materials at competitive international prices, which significantly affects our ability to compete in global markets.”
Moreover, industry sources report that the implementation of QCOs has restricted imports, particularly from major suppliers like China and Thailand. This has resulted in a substantial decrease in imports of polyester staple fibre (PSF) and viscose staple fibre (VSF) in the financial year 2023-24.
Regarding the certification process, industry players allege that BIS has selectively granted certifications, further limiting foreign suppliers’ access to the Indian market. They argue that these measures, intended to ensure product quality, have functioned more as non-tariff barriers, protecting domestic producers but raising costs for downstream users.
In a plea to suspend QCOs temporarily, industry bodies have proposed that such a move would allow domestic manufacturers to enhance competitiveness by accessing cheaper raw materials. They argue that the current regulatory framework stifles flexibility in sourcing and hampers the sector’s recovery amidst challenging market conditions.
The downstream industry received some relief when VSF imports were exempted from QCOs under the advance authorisation scheme, a decision later extended to PSF imports. However, stakeholders assert that these exemptions are insufficient and advocate for the complete removal of QCOs on textile inputs to facilitate a more conducive business environment.