Suspension of Quality Control Orders (QCOs) by the Ministry of Steel

The Ministry of Steel has chosen to suspend Quality Control Orders (QCOs) for 55 steel products to mitigate raw material shortages faced by consumer industries like automobiles and MSMEs. This takes the total suspended orders to 76.

Panel Recommendations

• The panel on non-financial regulatory reforms, led by NITI Aayog member Rajiv Gauba, recommended the revocation of QCOs for over 200 products.
• Concerns included increased compliance burdens, disrupted supply chains, and impacts on manufacturing competitiveness.
• The report advised scrapping 27 QCOs for key products such as plastics, polymers, base metals, footwear, and electronic components.

Recent Actions by Other Ministries

• The Ministries of Chemicals and Fertilisers, and Mines have already scrapped QCOs for 21 products like plastics and metals including tin, aluminium, lead, zinc, nickel, and copper.

Future Steps

• The Cabinet Secretariat is overseeing the rollout, with a deadline for action reports from concerned ministries set for November 15.
• This move is significant amidst India's efforts to negotiate a trade deal with the United States, aiming to alleviate 50% tariffs on Indian goods.

Impact of Suspension

Suspension of QCOs will broaden sourcing options for importers, removing the necessity to import only from Bureau of Indian Standards (BIS) licensees.

• This affects over a third of the 151 products covered by the Steel and Steel Products Quality Control Order.
• An inter-ministerial group (IMG) will assess 15 additional steel products to decide on their suspension.
• Standards considered sensitive or where domestic capacity is adequate have been retained.

Concerns and Precautions

The Global Trade Research Institute (GTRI) advises monitoring import trends to ensure product quality and prevent dumping.

• Monitoring includes customs data surveillance, trade remedy alerts, and landed price patterns to quickly address unfair trade practices.
• This strategy aims to maintain benefits like lower costs and smoother supply chains while protecting domestic industries.