Global concerns mount over India's QCOs in textile and apparel sector

Concerns over India’s Quality Control Orders (QCOs) in the textile and apparel sector have sparked intense debates at the World Trade Organization (WTO), with Indonesia and Thailand leading the charge during a recent Market Access Committee meeting. They joined other nations, including Canada, Japan, the UK, and the EU, in raising alarms about the potential trade-restrictive impacts of these measures. The QCOs, introduced by India to regulate product standards and curb substandard imports, apply to various items such as viscose staple fiber, medical textiles, and footwear. While aimed at enhancing local manufacturing, critics argue they may act as non-tariff barriers and disrupt international trade.

Concerns about protectionism or quality assurance

India's QCOs require products to meet Indian Standards, secure Bureau of Indian Standards (BIS) certification, and display the BIS mark. While this approach seeks to enhance domestic production quality, some WTO members argue it creates trade barriers under the guise of quality enforcement.

"QCOs should not be disguised trade barriers," said an Indonesian delegate at the WTO meeting. “Our exporters are finding it increasingly difficult to meet these complex and sometimes opaque standards, which seem to favor local producers.” Indonesia, a key exporter of VSF to India, reported a 25 per cent drop in shipments following the introduction of QCOs. As per Indonesian Textile Association, the compliance costs for VSF exporters increased by 15 per cent due to mandatory BIS certification, which requires Indian-specific testing protocols.

Thailand echoed similar sentiments, citing specific QCOs on copper, wooden boards, and tyres as measures that may lead to unintended quantitative restrictions.

In response, Indian officials have defended the policy. “These measures are not targeted at imports alone but apply equally to domestic production. By enforcing high-quality standards, we aim to boost consumer confidence and enhance India’s global trade footprint,” stated a government representative.

Table: Exports and imports affected by QCOs (2023-24) in $bn

(Source: Ministry of Commerce, India)

The domestic industry has largely welcomed the QCOs. “This is a long-overdue reform to curb low-quality imports and protect Indian consumers,” said Anil Mathur, President of the Indian Textile Manufacturers Association. “The QCOs ensure a level playing field for domestic producers.”

However, international trade experts warn against potential backlash. “While quality norms are crucial, excessively stringent requirements could invite retaliatory measures and harm India’s export prospects,” said Marie Dupont, a trade policy expert at WTO Watch.

A balancing act

India’s push for quality standardization highlights the challenges of balancing domestic interests with global trade obligations. As countries like Indonesia and Thailand amplify their concerns, the WTO may increasingly become a battleground for resolving these disputes. As the debate unfolds, the outcomes will likely shape the future of trade relationships in the textile and apparel sector, not just for India but for global stakeholders.