Easier imports for key sectors as 14 BIS quality orders scrapped
QCOs, mandatory certifications issued by the Bureau of Indian Standards (BIS), have increased compliance costs for small businesses, led to higher prices for consumers and reduced competitiveness, especially for micro, small and medium enterprises (MSMEs) and export-oriented industries.
The cancellation of QCOs marks a major shift towards liberalizing the industry and reducing the regulatory burden, providing major relief to the chemical, plastics and textile sectors.
Globally, nearly 70% of garments are produced using synthetic fibres, and Indian exporters have been unable to compete as they have to buy expensive domestically produced polyester fibers and yarns.
The chemicals and fertilizers ministry on Wednesday removed QCOs, which will make Chinese polyester fiber available to Indian garment and fabric manufacturers at rates 20-25% lower than domestic polyester, industry executives said.
This move will ensure raw material availability, ease import restrictions and reduce input costs for downstream MSMEs in the packaging, textile and molding sectors. “The decision to cancel QCO on polyester fiber and yarn is a major move to make India competitive in MMF (man-made fibre), which has a 70% market share. With free trade agreements already packaged and fast-moving European negotiations, India is poised to become a global leader in apparel and textiles.” said old Sanjay Jain. President of the Confederation of Indian Textile Industry. The South India Factories Association said the initiative will help avoid the closure of several powerloom units that are on the verge of becoming non-performing assets due to shortage and unavailability of required fibers at competitive prices. Its president, Durai Palanisamy, said: “Many domestic manufacturers of comfort wear and technical textiles were finding it difficult to source fibers globally at competitive rates, leading to loss of market share that had built up over decades. Exporters were losing confirmed orders as foreign buyers often insisted on sourcing fibers from designated international suppliers, putting Indian manufacturers at a disadvantage.”
Jain said it has been a long-standing demand of the industry to provide it with a level playing field as MMF accounts for a large chunk of the global industry and India has become uncompetitive due to very high raw material prices compared to China, Bangladesh and Vietnam.
Domestic consumers are also expected to benefit from the decrease in prices of polyester-based clothing. The central government had previously abolished import duty on cotton; this is expected to lead to record cotton imports in 2025-26.
Although the global textile and garment industry is dominated by MMF, the situation is opposite in India, where cotton dominates. The local industry was not growing due to restrictions in the availability of cotton; This was in stark contrast to rivals such as Bangladesh, Vietnam and Thailand.
“Polyester fiber and polyester yarn constitute the majority of synthetic fiber products and hence this action taken by the authorities will contribute to the growth of the MMF segment in India,” said Ashwin Chandran, President, Confederation of Indian Textile Industry.
India introduced QCOs on man-made fibers between 2022 and 2023; Previously, anti-dumping duty was applied to these fibers and their raw materials.
The removal of QCOs will make it easier to obtain raw materials at internationally competitive prices. “The cancellation of these QCOs, along with the export package announced on November 12, will act as a major confidence booster for the textile and garment industry,” said Chandran.
The Confederation of Indian Textile Industry has requested the government to provide similar relief on QCOs for viscose fiber and other cellulosic raw materials as India aims to create a $350 billion textile and apparel industry by 2030 and contribute $100 billion in exports.
