New quality control norms face pushback from WTO members, domestic industry

New Delhi/ Bengaluru: India’s move to introduce a raft of Quality Control Orders (QCO) to curb a Chinese import surge and boost exports to western markets is facing objections at the World Trade Organization (WTO) and from domestic manufacturers seeking more time to adjust.

India has brought a slew of products including toys, machinery safety equipment, pressure cookers, ACs and chemicals under compulsory certification. The Department for Promotion of Industry and Internal Trade (DPIIT) plans to issue 50 Quality Control Orders (QCO) by the second quarter of the next financial year.However, experts said that as per WTO, technical regulation implemented through QCOs and Compulsory Registration Orders (CRO) should be on the grounds of health, safety, environment, deceptive trade practice or national security. If they are not on these grounds they can be challenged at WTO. An official responded, “They [member countries] keep pressuring us at WTO calling it [QCO] a trade restrictive measure. But every country, be it the US or China, does it. The issue is that we are behind in terms of quality standards. And we need to push for better standards to be part of the supply chain. How are we going to export if our standards don’t match those of importing nations?”

In a letter written to commerce minister Piyush Goyal, the Confederation of Indian Textiles Industry stated that when the government came out with a QCO on viscose staple fibres it gave only 30 days to the industry to comply.

“Implementing the QCO on such short notice will make the already-stressed export value chain deprived of yarns and fabrics, thus leading to the cancellation of orders and making the Indian industry unreliable for any buyer. It will also lead to the diversion of export orders to our competing countries,” the letter read. Last month, Indian textiles exports registered a degrowth of 35.50% over the previous year.

“Regulatory impact assessment (RAI) is a formal exercise done by developed nations before coming out with a technical regulation. The regulations impact on trade, availability of labs and several such factors are assessed. Consultations should be done and typically at least six months are given to the industry to conform to the new standards. Moreover, regulation as per WTO should be on grounds of health, safety, environment, deceptive trade practice or national security. If they are not on above grounds they can be challenged in WTO,” Anil Jauhri, former CEO, National Accreditation Board for Certification Bodies (NABCB) said.

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