Govt rescinds QCO on viscose staple fibre to ease raw material access

Economic Secretary Anuradha Thakur urges the Indian financial sector to embrace disintermediation but ensure credit reaches MSMEs for equitable, sustained 8% GDP growth

Don't want to miss the best from Business Standard?

The textiles ministry on Tuesday rescinded the Quality Control Order (QCO) on a key textile raw material — viscose staple fibre (VSF) — with immediate effect, following the recommendation of a high-level committee headed by NITI Aayog member Rajiv Gauba.

 

The decision, taken in consultation with the Bureau of Indian Standards (BIS), is in response to the “persistent industry concerns about supply constraints and higher costs”, the textiles ministry said in a statement, adding that the move signals the government’s step to improve ease of business for textile manufacturers, exporters and MSMEs.

 

VSF is a man-made biodegradable fibre. The removal of the QCO on VSF will ensure seamless access to quality raw material, enhance global competitiveness and drive industry-led growth.

 

In an internal report submitted last month, the committee cited above had proposed the cancellation, suspension and deferment of QCOs for more than 200 products, citing concerns that these orders have increased compliance burdens and disrupted supply chains, thereby hurting India’s manufacturing competitiveness. Out of the over 200 products, it recommended that the government scrap 27 QCOs covering key inputs such as plastics, polymers, base metals, footwear and electronic components by November 15.

 

For instance, VSF is a key component in the synthetic textile value chain, and Indian garment manufacturers were not able to secure raw materials at globally competitive prices due to the imposition of the QCOs on inputs, the report had pointed out.

 

So far, government departments and ministries have withdrawn QCOs on 22 items.

 

“This policy move comes at a crucial time as India’s textile sector pursues the ambitious Vision 2030 — aiming to boost domestic consumption and meet the target of $100 billion in exports while growing the total textiles and apparel market to $350 billion,” the statement said.