Center advances QCO policy, introduces transition framework for manufacturers

NEW DELHI: The Center on Thursday introduced a formal transition mechanism under its quality control regime to allow companies facing temporary sourcing constraints to source products from otherwise ineligible manufacturers instead of relying on repeated exemptions from quality control orders (QCOs).

The aim of this move is to reduce supply chain disruption while maintaining mandatory quality standards. It follows a government review of the QCO regime after industry raised concerns over implementation, with the NITI Aayog recommending a more predictable and manufacturing framework that preserves product quality and consumer safety.

The Facilitation of Transition (Quality Control) Regulations, 2026, notified by the Department of Industrial Promotion and Internal Trade (DPIIT), creates a framework under which eligible companies can obtain temporary authorization to source products subject to mandatory QCOs from manufacturers who are otherwise ineligible under the existing regime, subject to continued compliance with Indian standards.

According to a notice issued on Thursday, the regulation applies to products regulated under ten existing QCOs, including toys, footwear, air conditioners and their components, furniture, domestic waterworks, washing machines, domestic electrical appliances and hinges.

Manufacturers will be able to obtain a BIS license exclusively for supply to companies that receive prior approval from DPIIT under the transitional mechanism. Such permits will only be available to companies registered under the Companies Act 2013 following a risk assessment by the Inter-Ministerial Implementation Committee.

The committee consists of representatives from DPIIT, Ministry of Consumer Affairs, Ministry of Commerce, Directorate General of Foreign Trade (DGFT) and Bureau of Indian Standards (BIS). It will assess applicants for technical capability, quality assurance systems, regulatory compliance history, supply chain controls and commitment to strengthening manufacturing capabilities in India through technology adoption, design capabilities and R&D.

Companies that have complied with the relevant QCO continuously for at least three years without failure may also qualify for authorization under the framework.

Products supplied under this framework must continue to conform to applicable Indian Standards, while BIS, in consultation with DPIIT, will conduct market surveillance to verify continued compliance.

The Center can suspend, modify or withdraw the permission in case of violation of conditions, misrepresentation or failure to meet the prescribed standards after giving an opportunity of hearing, it noted.

Applications under the transitional mechanism will be accepted for 24 months from the start of the contract, with the framework itself remaining in place for five years unless extended by the government. DPIIT will issue detailed operational guidance on documentation, eligibility, monitoring and compliance.

QCOs require certain products to conform to relevant Indian standards and bear the BIS mark before they can be manufactured, imported, stored or sold in the country. Non-compliance may be sanctioned under the BIS Act 2016.

In 2025, the government withdrew about 50 QCOs out of a total of 761 on the recommendation of the High Level Committee on Non-Financial Regulatory Reforms, chaired by NITI Aayog member Rajiv Gauba. There are currently 713 QCOs in practice.

Before the withdrawal and expansion of QCOs, of the 761,353 were from the Department of Industry Promotion and Internal Trade, 152 were from the Ministry of Steel, 77 were from the Ministry of Chemicals and Petrochemicals, 76 were from the Ministry of Textiles, 64 were from the Ministry of Electronics and IT and 14 were from the Ministry of Heavy Industries on 25 February