NEW DELHI, June 8
The government has exempted imported raw materials used by the chemicals and petrochemicals industry to manufacture products for exports from mandatory Quality Control Orders (QCOs).
The exemption from QCOs on imported raw material is for Advance Authorisation Holders, Special Economic Zones and Export Oriented Units (EoUs) making products falling under the ambit of the Department of Chemicals and Petrochemicals (DOCP), according to a notification by the Directorate General of Foreign Trade.
The industries that will benefit by the order include inorganic chemicals, organic chemicals, tanning or dyeing chemicals, plastic and its articles, synthetic rubber, man made fibres and filaments.
The industry has been seeking exemption from QCOs on raw materials as after the imposition of standards their choice of suppliers had narrowed down leading to many challenges. As per the QCO guidelines, anyone selling a product in India on which quality standards have been prescribed has to meet those standards. They also needed to apply for and obtain quality certification.
The certification process for sellers also involved examination of manufacturing facilities and meeting other conditions. According to the industry, not every seller of raw materials to India was willing to go through the process, leading to narrowing of their supplier base.
The DOCP joins Ministry of Steel, the Department for Promotion of Industry and Internal Trade, the Ministry of Textiles and Ministry of Mines whose products used as inputs for manufacturing goods for exports are exempted from QCOs.
In 2023-24, India exported $20.3 billion worth of agro chemicals, chemicals, dyes, cosmetics, essential oils and castor oils which was 14.3% lower than in 2022-23. Plastics industry, which will also benefit from the order, exported $ 11.5 billion dollars worth of goods last financial year, which was 3,5% lower than FY 23. The plastics industry is aiming to touch $ 25 billion in exports by 2027.
