When India's mushrooming quality orders ran into Trump

The potential policy shift could involve a review of India’s Quality Control Orders (QCOs)—a suite of regulations that require both domestic and foreign manufacturers to meet standards set by the Bureau of Indian Standards (BIS). These rules have become a flashpoint in trade talks, with the US arguing they unfairly restrict market access for American companies.

Indian negotiators have, in return, sought relaxations from the US on stringent compliance norms for Indian goods to help facilitate a mutually beneficial trade deal, the people said on the condition of anonymity.

“The review of QCOs is part of the government’s efforts to work on multiple fronts to ease trade frictions and arrive at a mutually beneficial deal," said one of the two people cited above.

India seeks to negotiate a bilateral trade agreement (BTA) with the US as reciprocal tariffs are estimated to shave off exports worth nearly $6 billion. Gems and jewellery, marine products, electronics, and auto parts sectors are expected to bear the brunt of the impact.

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“The change in the applicability of QCOs is being considered, which could include exempting certain products from mandatory certification—particularly those intended for industrial use or not meant for consumer sale," said the second person cited earlier.

“It may also include easing compliance requirements for imports from trusted countries that already meet widely accepted international standards," this person said.

Emails seeking comment from India’s ministries of commerce, external affairs, and consumer affairs went unanswered.

Industry advises caution

Under the current rules, products covered by QCOs cannot be sold in India without the Indian Standards Institution (ISI) mark—a mandatory certification attesting to the product’s quality as per BIS norms. The standards apply uniformly to Indian and foreign firms, but US trade representatives have argued that the requirements are overly complex and misaligned with global norms.

Violations can draw severe penalties. Under Section 17 of the BIS Act, 2016, companies face fines starting at ₹2 lakh, potentially up to ten times the value of goods sold, and imprisonment of up to two years.

A recent example is the QCO on polyethylene—a plastic widely used in packaging and industrial goods—which India introduced in January 2024. US officials have raised objections to the rule multiple times over the past three years, including at the World Trade Organization (WTO), arguing that the labelling requirements are cumbersome and incompatible with international standards.

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“Healthy imports are essential for a vibrant economy, and protectionist measures must be grounded in clear evidence of unfair trade practices," said Vinod Kumar, president at India SME Forum, a small business lobby. He cited the example of fasteners where the Directorate General of Trade Remedies (DGTR) found no dumping from China, yet a QCO was enforced, leaving many micro, small and medium enterprises “entangled in compliance burdens without justification. Such actions risk undermining industry confidence".

He, however, advised caution while removing non-tariff barriers. “We need a well-considered middle path that safeguards critical sectors and livelihoods, while also incentivizing and supporting MSMEs."

Currently, 761 products fall under QCOs, with the government planning to expand the list to 1,500 by year-end. The move is part of a broader effort to curb substandard imports, especially from China, and to raise the quality of domestic manufacturing. But with trade talks with the US gaining momentum, people familiar with the process said some QCOs may be softened to reduce tensions.

India also uses anti-dumping duties to curb the import of substandard goods, particularly from China, based on complaints from domestic industry. These duties are imposed only after a formal investigation by the Directorate General of Trade Remedies (DGTR), which assesses whether the imports are causing material injury to local producers.

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Non-tariff barriers such as QCOs, based on transparent procedures, play a critical role in ensuring that imported products meet safety and quality standards, said Ravi Saxena, co-founder and chief executive officer, Wonderchef, citing certifications like CE or RoHS in Europe, G-Mark in the Middle East, ETL in the US, and BIS in India. “When misused to block imports from specific countries, QCOs can have a more damaging impact than tariffs, leading to deeper trade tensions and persistent dissatisfaction among nations."

US flags Make in India

Trade tensions have sharpened in recent weeks.

In its 2025 National Trade Estimate (NTE) report released on 31 March, the US criticized several Indian trade practices, naming the ‘Make in India’ initiative as a key non-tariff barrier. The report said the policy—by reserving certain government procurement contracts for domestic suppliers—disadvantages foreign firms.

India, for its part, maintains that the programme is vital for boosting local manufacturing and job creation.

The United States Trade Representative’s (USTR) report also reiterated concerns over India’s longstanding restrictions on dairy imports, which require that imported products come from animals not fed meat, blood, or internal organs. While the US has called the requirement overly restrictive, India considers it a non-negotiable safeguard grounded in cultural and health norms.

The report was released on 31 March, just two days after a US delegation, led by assistant US trade representative Brendan Lynch, concluded a visit to New Delhi for in-person discussions on a proposed Bilateral Trade Agreement.

Tariff setback

India’s merchandise exports to the US have been on a steady upward trajectory in recent years, rising from $75.6 billion in FY22 to $78.3 billion in FY23. In FY24, exports dipped slightly to $77.5 billion, largely due to supply chain disruptions. Still, the long-term trend remains positive.

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The US, however, continues to run a sizeable trade deficit with India—$35.3 billion in FY24.

According to a report released Monday by the Global Trade Research Initiative (GTRI), India’s exports to the US could fall by $5.76 billion, or 6.4%, in calendar year 2025, following Washington’s reimposition of higher tariffs.