GTRI Urges DPIIT to Issue Clear Guidelines on New Quality Certification Reform
The Department for Promotion of Industry and Internal Trade (DPIIT) recently notified the Transition Facilitation (Quality Control) Order, 2026, aimed at streamlining compliance for various sectors. However, trade policy think tank Global Trade Research Initiative (GTRI) has cautioned that without transparent, time-bound operational guidelines, this reform could inadvertently create new bureaucratic bottlenecks for manufacturers.
Addressing the Need for Transparent Frameworks
The new mechanism provides an alternative compliance pathway under 10 selected Quality Control Orders (QCOs), impacting critical sectors including toys, footwear, furniture, air conditioners, compressors, and domestic electrical appliances. While the move intends to ease the burden of mandatory Bureau of Indian Standards (BIS) factory inspections, GTRI Founder Ajay Srivastava has emphasized the need for absolute clarity.
Srivastava has urged the DPIIT to release detailed documentation regarding eligibility criteria, evaluation methodologies, and specific timelines. To ensure industry confidence, he recommended a fully digital application and tracking system with defined service-level agreements, suggesting that applications should ideally be processed within a 60-to-90-day window. Furthermore, a formal mechanism for the appeal or review of rejected applications is seen as essential to maintaining systemic credibility.
The Risk of a 'QCO Plus' System
A significant concern raised by the think tank is the shift from technical conformity to broader industrial policy requirements. The new framework involves an Implementation Committee comprising representatives from the BIS, Department of Commerce, Department of Consumer Affairs, and the DGFT. Because this committee’s assessment extends beyond technical standards to include factors like localization and supply-chain development, experts warn it may become a "QCO Plus" system.
Rather than just verifying product quality, the regime may now function as a tool for industrial policy, where market access is tied to investment commitments. This shift could replace the existing challenge of physical factory inspections with a demanding administrative screening process characterized by broad discretionary powers.
Potential Barriers for Foreign Manufacturers
The eligibility criteria for the new mechanism may also present a hurdle for global players. Currently, only companies incorporated under the Companies Act, 2013, are eligible to apply. GTRI points out that this requirement means foreign manufacturers can only utilize the scheme if they have a registered Indian representative company. This limitation could potentially discourage overseas firms from participating in the Indian market under the new facilitative framework.
To mitigate these risks, GTRI has recommended that the DPIIT periodically publish anonymized data regarding application volumes, approval rates, average processing times, and specific reasons for rejections. Such transparency is vital to ensure that the reform achieves its goal of simplifying India's quality compliance landscape rather than complicating it.
Key Takeaways
- Need for Clarity: GTRI demands detailed guidelines on eligibility, documentation, and a 60–90 day window for application approvals to prevent uncertainty.
- Shift in Compliance Nature: The reform may transform quality control into a "QCO Plus" system, where market access depends on localization and industrial policy rather than just technical standards.
- Eligibility Constraints: The requirement for registration under the Companies Act, 2013, may limit the ability of foreign manufacturers to benefit from this new compliance pathway.