India needs firms that can grow, integrate into global value chains and compete internationally. To make this happen, the Quality Control Order (QCO) reassessment exercise needs to move forward.

Concerns over India’s QCOs and other non-tariff barriers also surfaced during the WTO’s eighth Trade Policy Review of India, held in July 2026, and were raised not only by major trading partners such as the European Union and the United States, but also by fellow BRICS members, including Brazil, China and Indonesia.

The number of products covered under QCOs expanded rapidly after 2019, from 88 products in 2019 to 765 by the end of December 2024. However, the pace of expansion slowed considerably towards the end of 2025. This was driven by an important shift in the government’s approach, with several QCOs being revoked or suspended, particularly those covering intermediate goods, as mandatory certification had raised concerns about input availability, costs and potential supply-chain disruptions.

The government’s new order

Recently, the government introduced the Transition Facilitation (Quality Control) Order, 2026, notified by the Department for Promotion of Industry and Internal Trade (DPIIT) on June 25, 2026. The order seeks to ease regulatory bottlenecks by allowing eligible firms facing difficulties in obtaining BIS Scheme-I certification to source products temporarily from BIS Scheme-II-licensed suppliers in specified sectors, including toys, footwear and air conditioners. Access to this transition mechanism is subject to prescribed eligibility criteria and approval by a committee constituted by the DPIIT.

These developments are welcome steps towards reducing the risk that quality regulations inadvertently disrupt supply chains or constrain domestic manufacturing. More than 600 QCO-covered products remain to be reassessed, including several critical intermediate inputs used across key manufacturing sectors such as chemicals, steel, textiles, machinery and electronics, and rubber and plastics.

Existing regulations can place a disproportionate burden on smaller industrial players, both by constraining their access to critical inputs and by imposing relatively high compliance costs. Given the extensive downstream linkages of these inputs, the next phase of QCO rationalisation should focus particularly on regulations affecting intermediate goods and assess their implications not only for product quality but also for input availability, costs, competitiveness and domestic value addition.

Findings of a recent study

In this regard, a recent CSEP study examined this question in detail for firms that use chemicals. Chemicals are critical intermediate inputs for downstream sectors such as rubber and plastics, pharmaceuticals and electronics, among others. The first QCO for a chemical product was introduced in 2018, and the number of chemical products covered rose to 52 by 2024. Consequently, the share of chemical-using firms exposed to regulation on the input side rose from 11.8% in 2019 to 56.6% in 2024.

When examining the impact of QCOs on chemicals on downstream user industries, the study finds that the effects vary considerably by firm size. Among larger firms, input QCOs are associated with a 9.6% increase in production alongside a sharp 37% decline in gross value added (GVA). This suggests that while larger firms can sustain and even expand output, this comes at the cost of lower value addition, potentially reflecting higher input costs and their ability to pass on at least part of these costs through higher output prices.

For smaller firms, input QCOs have no statistically significant effect on production or GVA but are associated with a steep 47.6% decline in profitability. This points to their more limited ability to absorb rising input costs and bear the additional compliance costs associated with QCOs.

The empirical evidence makes it clear that the adverse effects of QCOs on key inputs are not confined to smaller downstream firms. Even larger firms, which are better placed to absorb regulatory and input-cost shocks and are often able to sustain production, can experience significant declines in value addition. Supply-chain implications should therefore become an integral part of both the design of new QCOs and the reassessment of existing ones. Finally, the disproportionate burden on Micro, Small and Medium Enterprises (MSME) requires specific policy attention. Smaller firms need dedicated assistance to meet certification and compliance requirements, alongside appropriately designed exemptions or transition periods where compliance costs are particularly burdensome.

Quality standards, greater scale

As India works towards the ambition of Viksit Bharat 2047, achieving greater scale in manufacturing will be critical. Quality standards have an important role to play in that journey, but their success should ultimately be judged not by the number of products brought under mandatory regulation, but by whether they improve quality without constraining the scale, efficiency and competitiveness of Indian manufacturing.

Prerna Prabhakar is a Fellow at Centre for Social and Economic Progress (CSEP); Nancy Gupta is a Visiting Fellow at the Crawford School of Public Policy. The views expressed are personal

COONOOR

India is encouraging tea exports to explore new markets as shipments to Iran is hit by the war.

Amit Kumar, Joint Secretary of the Union Ministry of Commerce and Industry, told The Hindu on Wednesday that the government is focusing on markets such as Oman that is increasing its purchase of Indian tea. “We are analysing the data. There is substantial increase in export of tea to Oman (from India).”

When asked about the increase in import of tea and the concerns raised by the planters in this regard, he said the focus is on increasing exports to diverse markets and creating new markets for the exporters.

According to data shared by the United Planters Association of Southern India, India exported 153.24 million kg of tea between January and July last year and it declined 16.11 % to 128.56 million kg between January and June this year. India imported 15.1 million kg of tea between January and June 2026 as against 10 million kg during the same period last year.

Ajoy Thipaiah, outgoing president of UPASI, said at its annual meeting at Coonoor on Wednesday, “This renewed inflow of imported tea is a matter of concern for the domestic industry and calls for appropriate remedial measures to safeguard the interests of Indian tea producers.”

On September 17, 2026, the board of Tata Sons voted on a third five-year term for N. Chandrasekaran as Executive Chairman. Mr. Chandrasekaran abstained from voting voluntarily and the recorded result was four to one. Within hours the Tata Trusts, owners of about 66% of Tata Sons, called the decision legally void. The claim rests on how several provisions of the Articles of Association, the company’s rulebook, fit together.

With a 66% share, the Trusts could have packed the board. Instead, under Article 104B, the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust act jointly and nominate one-third of the directors. So now, on a board of six, two seats are held by Noel Tata and Venu Srinivasan.

Article 121 gives these seats their weight; any matter the board decides by majority requires the affirmative vote of a majority of these nominated directors. If the votes are equal, the chairman has a casting vote.

The chairmanship is built in steps. A person must first be a director. A new Chairman of the Board is appointed under Article 118, subject to the voting requirement in Article 121 (whether it also governs a reappointment is disputed). Only a Chairman may be made Executive Chairman under Article 105(b).

On September 17, 2026, the nominees split — Mr. Srinivasan for and Mr. Tata against. Harish Manwani, an independent director chairing the item in Mr. Chandrasekaran’s place, reportedly used a casting vote in favour.

In the Cyrus Mistry litigation in 2019, the National Company Law Appellate Tribunal (NCLAT) called the nominees’ affirmative vote indispensable, which the top court later upheld in 2021. Neither court had to decide whether a casting vote can cure a split between the two nominees.

Where the readings part

Tata Sons relies on two legal opinions. Senior advocate Sudipto Sarkar has advised that a casting vote can break a tie between the nominees as well as a board tie — that whoever presides may use it because Article 121 says Chairman, and not Chairman of the Board. Justice B.N. Srikrishna, a former Supreme Court judge, agrees and advised that since no majority could be found between the nominees, the casting vote ended the deadlock. However, the Trusts referred to a contrary opinion held by former Chief Justice D.Y. Chandrachud.

The company’s reading has a textual footing: the words about equal votes do not say whose votes are meant. But Article 121 has two parts and they must be read together. The first sets a condition: a majority of the Trusts’ nominees must support the decision. The second breaks a tie when the board is evenly split. The board as a whole was not evenly divided; the only split was between the two nominees. With two nominees, a majority means both. When Justice Srikrishna says no majority could be found, it means that the condition was not met. The company’s reading uses the tie-break to make up for it. The Trusts’ reading gives each part its own role. If both nominees support a decision and the other four directors divide evenly, the board is tied three all, and the casting vote settles it.

Other parts of the rulebook support this reading. Articles 104B, 86 and 118 resolve any difference between the two Trusts by a majority of their trustees, never by the chair of a board meeting.

Defending these rules against Mr. Mistry in 2019, Tata Sons itself argued that where the Articles require the support of particular directors, a decision passes only if those directors agree. Here, those are the two Trust nominees. Mr. Manwani is an independent director; on the Trusts’ reading, his casting vote cannot stand in for their agreement. The minutes of the meeting Mr. Tata has produced record the February 2022 extension of Mr. Chandrasekaran’s tenure as made under Article 118, and Article 118 is itself subject to Article 121.

The advisers argue, with some force, that no selection committee was needed for a reappointment, and that Mr. Chandrasekaran’s August letter (wherein he detailed he did not wish to hold the post) did not bind him. Neither point changes Article 121’s arithmetic: with both nominees present, the required majority was two.

Only a director can be chairman, so directorship matters. The August general meeting was adjourned for want of a quorum before shareholders could consider Mr. Chandrasekaran’s reappointment.

The Trusts are weighing legal proceedings. A mutual settlement is preferred to a lengthy litigation, which could spiral into uncertainty about the group’s leadership.

Prasanth Raju is an advocate practising in the Bombay High Court. Views are personal

Technology and institutional finance, which are accessible to small-scale growers too, in the plantation sector are critical for the sector’s growth, said Amit Kumar, Joint Secretary of the Ministry of Commerce and Industry, on Wednesday (September 23).

Speaking at the annual conference of the United Planters Association of Southern India and presenting the TGLIA:STC awards at Coonoor, he said the future of the sector lies in partnership among all the stakeholders of the sector.

An eco system should be built for inclusive growth of the sector, where every kilogram of plantation produce has better value addition and is globally recognised.

The plantation sector contributes to agriculture output and export earnings, is a means of livelihood to thousands, provides raw material to multiple industries, and supports many downstream industries. Hence, it is an entire economic ecosystem, he said.

In a developed India, the plantation sector should have higher value per hectare, better technology adoption, increased exports, higher income for growers, and higher productivity. Its focus should move from commodities to value-added products.

Research in plantation sector should be connected to the farmer, who in turn should be connected to the processor. The processor should develop brands that target global consumers. “Sustainability should be part of our business model. The plantation sector should be able to produce more with less water and other natural resources,” he added.

At the annual meeting of the Association, Abhishek Poddar, managing director of Matheson Bosanquet Enterprises, has been elected president of The United Planters’ Association of Southern India (UPASI) for 2026-27.

Anil Mathew, executive director (Plantations), A V Thomas Group Companies, has been elected vice-president of UPASI for 2026-27. He has 35 years of experience across a wide range of plantations crops, including tea, coffee, rubber, cardamom and pepper.

The Rubber Board will launch a digital platform called ‘INR Konnect’ on a pilot scale soon to document all details of untapped rubber plantations.

Executive Director of the Board M. Vasanthagesan said at the annual conference of the United Planters Association of Southern India in Coonoor on Wednesday (September 23) that growers have plantations in which the rubber is not tapped regularly for multiple reasons.

The adopting agencies should know details about such plantations, and the plantation owners need to know the credible agencies that they can approach for tapping. “The platform has the potential to increase production by 20%,” he told The Hindu. The pilot stage of the project is likely to be rolled out in a month.

Further, with increase in rubber imports, the Rubber Board has taken up with the Bureau of Indian Standards the need to come up with standards for compounded rubber. “There is no monitoring mechanism now for rubber imports. We need standards first to monitor the imports,” he said.

Principal Secretary to the Prime Minister P.K. Mishra on Wednesday cautioned banks against reviving aggressive lending practices driven by short-term optimism, warning that poor credit assessment in the past had forced the banking system to divert significant resources towards cleaning up stressed assets.

“The cleanup of the banking system required considerable resources and time. Those resources could otherwise have supported productive investment. We should therefore preserve the institutional memory of that episode,” Mr. Mishra said while addressing the SBI Banking and Economics Conclave in Mumbai.

“Credit must be appraised against the economics of the project rather than the enthusiasm of the moment. That is the surest protection against a repetition of the cycle of excessive lending, stressed assets and subsequent cleanup,” he added.

The remarks come at a time when India’s banking sector has emerged from one of its worst asset quality crises, with gross non-performing assets (GNPA) at a multi-decadal low. The GNPA ratio of the banking system fell below 1% in the first quarter of fiscal 2027, compared with nearly double-digit levels about a decade ago during the peak of the bad loan crisis.

The earlier deterioration in asset quality had contributed to the “twin balance sheet problem”, where stressed corporate borrowers and weakened bank balance sheets constrained fresh investment. The government responded through bank recapitalisation, consolidation of weaker lenders and regulatory measures aimed at strengthening risk management practices.

Mr. Mishra’s comments assume significance as banks are currently witnessing strong liquidity conditions and improved balance sheets, raising concerns that renewed credit growth could lead to excessive risk-taking if lending decisions are influenced by market optimism rather than fundamentals.

Manufacturing, FDI to strengthen resilience

Highlighting the need to improve India’s macroeconomic resilience, Mr. Mishra stressed the importance of reducing dependence on imports and strengthening domestic manufacturing capabilities.

“We have a significant merchandise trade deficit. We must make things at home and competitively,” he said, adding that improving manufacturing performance and skilling the workforce would remain critical to sustaining economic growth.

He also underlined the importance of attracting foreign direct investment (FDI), describing it as a source of long-term capital at a time when global capital flows have become increasingly volatile.

“Capital is fickle-minded,” Mr. Mishra said, emphasising the need to create conditions that encourage stable and long-term investments.

Enterprises must move beyond AI experimentation and focus on solving real business problems, building domain expertise and empowering their workforce, said Sindhu Gangadharan, Managing Director of SAP Labs India.

Speaking at a fireside chat on “Leadership in the AI Era” at the India Advantage Summit 2026 on Wednesday, Ms. Gangadharan said organisations should stop viewing artificial intelligence (AI) merely as a technology upgrade and instead treat it as a transformation involving leadership, business processes and people.

She said the rapid advancement of AI has made technology development faster than ever, but the bigger challenge for companies is identifying the right problems to solve and deciding what solutions need to be built.

“AI is actually a leadership transformation that we need to look at,” she said, stressing that companies should begin with the outcomes they want to achieve rather than searching for problems where technology can be applied.

While AI has significantly reduced the time required to build solutions, she said, understanding business challenges, customer needs and industry-specific complexities remains essential. Deep domain knowledge and close engagement with customers are critical to identifying meaningful use cases, she added.

Ms. Gangadharan also highlighted the challenge businesses face in scaling AI initiatives beyond proof-of-concepts. She cited the example of an AI-powered billing agent developed for a global professional services company, which handles complex processes involving workforce deployment, regulatory requirements, legal considerations and pricing. The solution has helped reduce work previously managed by more than 1,000 executives, she added.

She pointed to other applications, including the use of multiple AI agents to transform vaccine manufacturing processes and AI-driven systems deployed across manufacturing plants to improve traditionally manual quality checks.

According to Ms. Gangadharan, organisations that successfully move from AI pilots to large-scale deployment are those that combine business understanding, domain expertise, technology capabilities and strong data foundations.

Stressing that “AI is only as successful as the quality of data available,” she said underlining the importance of access to reliable datasets and a robust technology architecture for enterprises seeking to harness AI effectively.

Indian oil market companies (OMCs) are estimated to be incurring under-recoveries of ₹8 per litre on petrol, ₹9 per litre on diesel sales and nearly ₹300 per domestic LPG (liquefied petroleum gas) cylinders, according to credit rating agency ICRA.

The combined impact translates into an estimated daily loss of about ₹530 crore from the sale of petrol, diesel and cooking gas, ICRA analysts said.

“The escalation of the conflict in West Asia and the [resulting] disruption to key oil supply routes has led to a sharp increase in crude oil prices, which has also resulted in sizeable marketing and LPG under-recoveries for oil marketing companies,” said Prashant Vashisht, senior vice-president and co-group head of corporate sector ratings at ICRA.

U.S. LPG have volumes

The pressure on LPG costs has been amplified by supply dynamics in the global market.

Separately, Mr. Vashisht explained large volumes of the bottled hydrocarbon gas are concentrated among a few producers, including the U.S., Australia and Saudi Arabia.

Mr. Vashisht added that higher freight costs whilst procuring from U.S. puts additional pressure on the LPG dynamics.

“The U.S. alone produces about 27 million tonnes of LPG. That is to do with the shale gas revolution there and more natural gas [that is produced]. Therefore, I think volumes would be more available in that geography than compared to others, say like Australia,” he said, responding to a query from The Hindu about the essentiality of LPG from U.S.