Govt withdraws BIS norms on polyester chain, polymers; user industry cites relief on costs for MSMEs

QCOs issued by the Bureau of Indian Standards (BIS) subject manufacturers and importers of specific goods to certain standards. While they ensure greater quality, they also raise costs, which cascade down to industries which use these raw materials.

The order from the department of chemicals and petrochemicals comes after a Niti Aayog committee led by former cabinet secretary Rajiv Gauba recommended relaxing QCOs. These orders raise costs for micro, small and medium enterprises (MSMEs), which import them in large quantities.

While the withdrawal will make raw materials accessible for makers of textiles and PVC products, it may impact manufacturers such as Reliance Industries Ltd, Indian Oil Corp. Ltd and the Aditya Birla Group companies Grasim and Thai Acrylic Fibre.

Queries sent to Indian Oil and the Aditya Birla Group remained unanswered till press time.

Reliance has always priced its products keeping the long-term growth of textile industry in mind, a company spokesperson said in an email. “This has been our philosophy from the from the day we started manufacturing products & polyester and integrated backwards. We welcome the decision of the government, and we will continue to stay competitive offering the best quality products to the downstream industry for domestic and value-added export market.”

The withdrawal of QCOs fulfils an MSME industry wish, significantly benefiting textile makers, said Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India. However, it also goes against the government’s original plan to expand the ambit of QCOs to cover more products.

The raw materials now free of QCOs are used to make man-made fibres, plastics, packaging, footwear, consumer goods, appliances and automotive components. Several of them such as PTA, MEG, polypropylene, PVC and ABS are among India’s most critical chemical imports, sourced from China, South Korea, Taiwan, Saudi Arabia, the UAE, Thailand and Singapore. Products like polyester staple fibre, POY and FDY also rely on imports during periods of domestic shortage, particularly from China and Indonesia.

Welcome decision

Just last week, the Chemicals and Petrochemicals Manufacturers Association had written to the government, making a strong case for QCOs. While industries abroad benefitted from state subsidies, India’s QCOs helped counter them, the association had said. On Thursday, the association did not respond to a query about the government decision. The association had earlier written to the Prime Minister on 29 October and to union minister for chemicals and fertilisers JP Nadda on 9 November.

Mint had reported on 13 December that India plans to create an enabling provision for domestic industry to bypass certain QCOs and extend compliance deadlines. With the withdrawal of 14 products from the QCO ambit, a total of 744 products now remain regulated through Quality Control Orders.

The industries using these products welcomed the move.

The Confederation of Indian Textile Industry (CITI) said the decision resolves a long-standing concern. Chairman Ashwin Chandran said that the withdrawal “comes as a great relief, as it has been a long-awaited demand of all the user industries,” noting that polyester fibre and yarn comprise the bulk of man-made fibre products.

Chandran added that easier access to raw materials at globally competitive prices would improve cost competitiveness and, together with the export package announced on 12 November, act as “a huge confidence-booster for the textile and apparel sector.”

India’s import reliance remains high across these materials. PTA and MEG—key components of the polyester value chain—are primarily sourced from China, South Korea, Thailand, Indonesia, Malaysia, and Taiwan, with additional supplies coming from Saudi Arabia and Kuwait. Polypropylene and polyethylene materials used in moulding and extrusion come largely from Saudi Arabia, UAE, Singapore, South Korea and China. PVC homopolymers, ABS, EVA copolymers, polycarbonate and polyurethanes are imported from China, South Korea, Taiwan, Thailand, Japan and producers in the Gulf.

Raising production

In response to a question, minister of state for chemicals and fertilizers Anupriya Patel told the Lok Sabha on 8 August that in 2024-25, the country imported a total of 57.38 million metric tonnes of chemicals and petrochemicals, valued at ₹6.3 trillion.

India has also expanded its production base for several of these petrochemical and polyester inputs in recent years. The country’s total installed capacity of polyester fibres and yarns stood at around 4.5 million tonnes in FY23 and FY24. In fibre intermediates, capacity for MEG increased from 2.21 million tonnes in FY23 to 2.34 million tonnes in FY24, while PTA capacity rose from 3.87 million tonnes to 4.02 million tonnes during the same period. Overall, petrochemical capacity increased from 50.77 million tonnes in FY23 to 52.29 million tonnes in FY24.

A senior industry executive stated that the relaxation will ensure steady availability of raw materials for sectors such as garments, apparel, leather and other downstream industries, allowing them to source inputs at more competitive prices and better align their finished products with global prices.

Vinod Kumar, president of the India SME Forum, said this also brings much-needed breathing space for SMEs struggling with rising input costs, uncertain supply lines, and the compliance burden.

Abhash Kumar, trade economist and assistant professor, economics at Delhi University, said the withdrawal of the QCOs marked a change in the way India approached quality regulation for industrial raw materials. “For many mid-sized manufacturers, the issue was never about resisting standards but about the pace and practicality of implementing them. This move gives the ecosystem time to build testing capacity and transition more smoothly, without disrupting production or export timelines,” he said.

The country has a sizeable domestic petrochemical industry, with Reliance Industries, IOC, the Aditya Birla Group, Indo Rama Synthetics, JBF Industries, Filatex India and Bombay Dyeing, and GAIL among the large producers.

The withdrawal of QCOs will open up the import market, which means demand for these inputs is likely to rise, and supplier countries may recalibrate prices based on market conditions, said Rajeev Gupta, joint managing director, RSWM Ltd, a leading textile manufacturing company.

“With mandatory BIS certification no longer required, importing these raw materials becomes easier and more feasible. Since polyester and polymer yarns form a major part of the MMF (manmade fibre) industry, this move will encourage production of MMF-based textiles and improve the sector’s export competitiveness. Cheaper and more easily available raw materials will strengthen India’s position in global markets,” he said.

“However, for spinners—particularly synthetic and grey yarn spinners—there could be some pressure as imported yarn may also come in,” Gupta said.

On 23 July, the government had withdrawn QCOs for three key industrial chemicals—acetic acid, methanol and aniline—bringing the total number of products under the QCO purview down to 758 from 761. The withdrawal of several QCOs goes against the government’s original plan to bring over 700 more products under QCOs in FY26.

Of the 744 products currently under the QCO regime, 353 are under the Department for Promotion of Industry and Internal Trade (DPIIT), 151 under the steel ministry, 60 under the Department of Petrochemicals, 76 under the textiles ministry, 64 under the ministry of electronics and IT, and 14 under the ministry of heavy industries, according to government data.

The initiative began with just 121 products in 2014 when the National Democratic Alliance first came to power at the Centre.