In the midst of the flared trade wars which increased the urgency for the diversification of exchanges in the world, India has referred to greater flexibility in commercial concerns-such as quality control orders (QCO)-raised by Western partners, in particular the United States, the United Kingdom, the EU and New Zealand, which are all negotiating a trade agreement with Indian, Indian Express.
This occurs after the end of the initial talks between India and the United States when officials of the United States were here in March to finalize the scope of the trade agreement. The United States then requested a range of Indian parties commitments to facilitate access to the American products in India.
In his report on obstacles to foreign trade, the United States Trade Representative (USTR) had particularly underlined the faults of QCOS declaring that the standards of the Bureau of Indian Standards (BIS) are “not always entirely aligned on international standards” and “without clear demonstration that international standards would be ineffective or inappropriate”.
“A certain number of concerns have been raised by exporters on QCOs, who find it difficult to source the entry materials due to these standards, during a meeting with government representatives on Wednesday. The government said that it would accelerate the concerns raised by Western partners, because QCOs are not mainly challenges related to the quality of China and the ASEAN region”.
QCOs, which generally require foreign exporters and national producers compulsorily comply with specific quality standards, have been a major source of concern for national manufacturers who import entry materials and foreign countries that seek to access the growing Indian market.
In recent years, India has considerably increased the use of QCOs to prevent the influx of poor quality products and simultaneously build a national manufacturing base, in tandem with programs such as production linked to production (PLI).
However, the United States, the EU and the United Kingdom have raised up to 10 commercial concerns concerning QCO to the World Trade Organization (WTO). These cover a range of products, including furniture, automotive parts, artificial fibers, kitchen utensils and utensils, toys, chemicals and shoes.
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QCOS lack clear means to establish compliance, presumed USTR
The USTR has said that qcos often lack “clear means of building compliance” or involve significantly heavy requirements. “For example, India demands that chemicals have bis marks before importation, which requires a site visit to the manufacturing installation by an Indian inspector,” said the USTR.
“The prices of National Pharmaceutical PRICING AUTHORITY (NPPA) caps the coronary stents and knee implants.
Earlier, the United States also asked India to “ensure” that QCOs “do not create unnecessary obstacles to international trade”, in a commercial concern raised against QCO on chemicals and petrochemical products at a June 2024 meeting of an OMC committee. Similar concerns have been raised by the United States, the EU and five other countries.
At the same time, even the national industry has increased red flags on certain QCOs which apply to key entry goods such as chemicals and artificial fibers. Domestic users of these goods have long called for these qcos to be abandoned, arguing that they restrict access to imports of raw materials and undermine the competitiveness of exports.
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The EU, alongside Indonesia, raised a commercial concern concerning the QCO of India on viscose fibers and supported the concern of South Korea concerning QCO on fibers and chemical wires, including polyester. Viscose and polyester fibers are key inputs for synthetic textiles.
EU on Indian quality standards
During a WTO meeting held in November 2024, the EU said that India’s policy “to adopt” QCOS through the sectors “continues to send disturbing signals to the EU industry, EU investors and EU member states, because the majority of QCO introduced by India seem to have a protectionist orientation”.
“The EU regrets that the important problems encountered by EU viscose fiber EU exporters persist and cause major problems to access the Indian market.
The EU has also described the current certification process carried out by bis as “excessively heavy and expensive”.
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“The manufacturing facilities of the exporting country must be checked in person by a team of BIS managers – at the cost of the EU company – in a procedure which can take several months to organize. Such a system effectively prevents EU companies from accessing the Indian market and thus creates an obstacle to negotiate, “he added.
The emphasis on the QCOS softening reported by the United States, the EU and the United Kingdom coincides with the current trade negotiations of India: a bilateral agreement with Washington and separating the ALF with Brussels and London.
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