Bureaucratic Hurdles: The Impact of QCOs on Indian MSMEs

NITI Aayog Vice Chairman Suman Bery criticizes Quality Control Orders (QCOs) as barriers to imports, raising costs for MSMEs. Bery highlights that India's strict adherence to WTO standards leads to high compliance costs, exacerbating production expenses and creating inefficiencies in the manufacturing sector.

NITI Aayog Vice Chairman Suman Bery has criticized the introduction of Quality Control Orders (QCOs) by Indian bureaucracy, labeling it as a 'malign intervention' that restricts imports and escalates costs for Micro, Small and Medium Enterprises (MSMEs).

During a media briefing, Bery articulated that India's keen adherence to World Trade Organization compliance has fostered alternative restrictive approaches like QCOs, further inflating production expenses by introducing tariff-like barriers. He elaborated on this concern while releasing the report 'Unlocking $25+ Billion Exports: India's Hand & Power Tools Sector,' highlighting a 14-17% cost disadvantage.

The report recommends reconsidering QCOs on essential raw materials including steel to reduce production costs. It underscores that significant import duties on key raw materials, including steel and PVC resins, lead to manufacturing inefficiencies. Bery emphasized that heavy reliance on imports, with over 50% of PVC resin and nearly all Nylon-6 sourced internationally, underscores the need for QCO rationalization.

(With inputs from agencies.)