Centre to wield quality control ‘stick' to drive exports
The Indian government is not keen on providing further subsidies to export-oriented sectors of the economy, according to a senior government official.
Instead, the government is going to follow a more 'carrot and stick' approach where quality control orders (QCOs) are going to increasingly be used to push Indian industry to become internationally competitive, while all non-subsidy help will be provided to them in terms of land acquisition and other regulatory hurdles.
'The government has taken a call that just giving subsidies has not really worked in boosting India's exports,' the official said. 'There is an issue with the quality of the product as well. That's why we are now focussing on QCOs to ensure that our exports meet the minimum quality standards.'
'The government is not inclined to provide more subsidies to sectors than it already has,' the official added. 'But all the non-subsidy help that we can provide will be provided, like easing land acquisition, or any other regulatory issues they come to us with.'
However, The Hindu has also learnt that the issue of providing subsidies for the production of rare earth batteries in India has come up for discussion in the government, in light of the supply crunch due to China banning the export of these products.
QCOs are regulations that state that products manufactured, imported, sold in India, or manufactured for exports, must meet minimum quality standards as laid out by the Bureau of Indian Standards (BIS).
As of March 2025, various central ministries had notified a total of 187 QCOs covering 769 products.
There has been a debate in India on whether QCOs are helping or hurting. According to the government, including Commerce Minister Piyush Goyal, QCOs are the path to enhancing India's export competitiveness.
However, Niti Aayog Vice Chairman Suman Bery has said that QCOs are a 'malign intervention' to stop imports from certain countries, but that would actually end up hurting India's MSMEs.
The government has provided some relief for certain export categories that rely on inputs from abroad.
'To ensure competitiveness of Indian exporters, exemptions from mandatory QCOs are available for imports intended for export production under specific schemes, such as advance authorisations, by export oriented units (EOUs), and in Special Economic Zones (SEZs),' the Minister of State for Textiles Pabitra Margherita said in a reply to the Lok Sabha in March 2025.
The government's stance on subsidies runs against what some industries have been demanding. The Federation of Indian Mineral Industries (FIMI), for example, on Tuesday released a report in which it called for an upfront subsidy of ₹10,000-15,000 per kWh on the purchase of alternate fuel Heavy Earth Moving Machinery (HEMM) for mining applications.
'One of the primary barriers to e-truck adoption is their high upfront cost, with electric trucks and other HEMMs currently priced at nearly three times that of their diesel counterparts,' FIMI noted in its report. 'Such price disparity discourages potential buyers.'
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