High-Level Committee Proposes Rollback of Overlapping Quality Control Orders

In October 2025, the High-Level Committee on Non-Financial Regulatory Reforms (HLC-NFRR) released its 2nd report, shedding light on the challenges and recommendations for improving the regulatory framework in India. This comprehensive report aims to address the regulatory barriers that impact manufacturing competitiveness, ease of doing business, and the broader objectives of the Make in India initiative. Below, we delve into the key highlights and recommendations from the report.

Understanding the High-Level Committee on Non-Financial Regulatory Reforms 

The HLC was constituted by the Government of India to review non-financial sector regulations, certifications, licenses, and permissions. Its primary goal is to develop a modern, flexible, and trust-based regulatory framework that aligns with the government’s commitment to enhancing Ease of Doing Business (EoDB) and Ease of Living.

Key Objectives of the HLC

Simplify and consolidate regulations to reduce compliance burdens.
Evaluate the relevance of existing certifications and processes.
Promote self-certification and third-party inspections.
Suggest administrative reforms to streamline procedures and standards.
Focus on MSMEs, foreign trade, environmental regulations, and tax registrations.
Decriminalize regulatory and compliance requirements.

The Impact of Quality Control Orders (QCOs) 

Quality Control Orders (QCOs) were introduced to ensure product quality and consumer safety. However, the report highlights several unintended consequences of QCOs, including supply chain disruptions, increased compliance costs, and reduced competitiveness in domestic and international markets.

Key Challenges Identified 

Impact on MSMEs: Small enterprises face prohibitive costs for obtaining and renewing licenses, reducing their competitiveness.
Supply Chain Disruptions: QCOs on raw materials and intermediate goods have disrupted manufacturing processes and increased costs.
Technology Transfer and Innovation: Newly introduced BIS standards have discouraged foreign investment and technology transfer in innovation-driven industries.
Export Decline: Higher input costs have eroded India’s price competitiveness, particularly in sectors like textiles and footwear.

Criteria for Evaluating QCOs 

The report outlines four key criteria for assessing the application of QCOs:

Risk Assessment: QCOs should target products with significant health, safety, or environmental risks.
Impact on Competitiveness: QCOs should not disproportionately affect the competitiveness of downstream industries.
Domestic Production Capacity: QCOs should not be imposed on products with limited domestic production capacity.
Alignment with International Standards: QCOs should align with global quality assurance frameworks to avoid unnecessary compliance burdens.

Key Recommendations

The HLC has proposed seven targeted reforms to restore balance between quality regulation and industrial competitiveness. These include:

1. Revocation of QCOs on Plastics and Polymers 

The report recommends revoking QCOs on materials like polyethylene, ABS, polypropylene, and PVC, as these base polymer resins do not pose direct consumer safety or environmental hazards in their unprocessed form. The implementation of QCOs has led to higher domestic prices and restricted raw material availability.

2. Revocation of QCOs on Base Metals 

Base metals like copper, nickel powder, lead, and tin are essential for various industries. The report suggests revoking QCOs on these materials, as they do not pose direct consumer safety risks and their regulation has led to supply rigidity and price volatility.

3. Suspension of QCOs on Steel Product Categories 

The report recommends suspending QCOs on specific steel product categories, including engineered products, automotive-grade steel, electrical-grade steel, wires and ropes, alloy steel, and consumer end products. These QCOs have raised input prices, disrupted production, and constrained downstream growth.

4. Revocation of Steel Import Monitoring System (SIMS) 

The SIMS, introduced in 2019, has increased administrative burdens and disrupted supply chains. The report suggests revoking SIMS and the NOC requirement for imports of non-BIS steel grades to reduce compliance costs and improve ease of doing business.

5. Revocation of QCOs on Footwear and Electronics Components 

The report highlights the negative impact of QCOs on imported intermediate materials critical for these sectors. Rising input costs and supply bottlenecks have reduced India’s competitiveness in global markets. The report recommends revoking QCOs on items like copper wires, flux-cored solder wire, wrought aluminum, and pressure-sensitive adhesive tapes.

6. Defer Implementation of Upcoming QCOs 

The report advises deferring the implementation of upcoming QCOs and Omnibus Technical Regulations (OTR) to avoid compounding the compliance burden on manufacturers and MSMEs. It suggests referring these regulations to the Inter-Ministerial Group (IMG) for review.

Global Regulatory Comparisons 

The report provides a detailed comparison of India’s regulatory framework with those of the EU, USA, and Japan. It highlights that India’s mandatory BIS factory-level certifications for raw materials and finished goods are more stringent than the voluntary or market-based conformity approaches adopted by other major economies.

Conclusion

The 2nd Report of the High-Level Committee on Non-Financial Regulatory Reforms is a significant step towards creating a balanced regulatory framework that promotes industrial competitiveness while ensuring quality and consumer protection. By addressing the challenges posed by QCOs and recommending targeted reforms, the HLC aims to align India’s regulations with global standards and enhance the Ease of Doing Business.

As India continues its journey towards becoming a global manufacturing hub, the implementation of these recommendations will play a crucial role in fostering innovation, attracting foreign investment, and boosting exports. The government’s commitment to a trust-based regulatory framework is a promising sign for businesses and consumers alike.

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Source: NITI Aayog

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