Rising Compliance Costs Raise Concerns for MSMEs

New Delhi, April 14, 2026:
The government has been urged to introduce a cap on testing charges for routine industrial products under the Quality Control Orders (QCOs), as rising compliance costs are increasingly burdening manufacturers and small importers.

According to the Global Trade Research Initiative (GTRI), while the QCO framework is designed to enhance product quality and consumer safety, the current cost structure is creating financial strain—particularly for micro, small, and medium enterprises (MSMEs).

Bottlenecks in Testing Infrastructure

GTRI highlighted that the rapid expansion of QCOs across sectors has outpaced the growth of India’s testing infrastructure. This imbalance has led to:

• Delays in certification approvals

• Limited availability of accredited testing labs

• Increased turnaround time for product clearances

These challenges are making it difficult for businesses, especially smaller players, to maintain operational efficiency and meet regulatory requirements on time.

Risk of Market Consolidation

Experts warn that high testing and certification costs could lead to unintended consequences for the competitive landscape.

Ajay Srivastava, Founder of GTRI, noted that excessive compliance costs may push smaller importers out of the market, resulting in:

• Increased dominance of large corporations

• Reduced competition in key industrial segments

• Potential price increases for end consumers

This trend could undermine the broader goal of fostering a competitive and inclusive manufacturing ecosystem in India.

Balancing Quality and Affordability

The QCO policy has been instrumental in improving product standards and aligning Indian manufacturing with global benchmarks. However, industry stakeholders believe that a balance must be struck between quality enforcement and cost efficiency.

Suggested measures include:

• Introducing a cap on testing charges for standard products

• Expanding accredited testing facilities across regions

• Streamlining certification processes through digital platforms

• Offering subsidies or support for MSMEs

Outlook for Policy Reforms

With India aiming to strengthen its manufacturing base and boost exports, addressing compliance-related challenges will be crucial. Policymakers are expected to review the cost structure and infrastructure gaps to ensure that quality regulations do not hinder business growth.

Conclusion

While Quality Control Orders remain a key pillar in enhancing product standards, rising testing costs pose a significant challenge for MSMEs and small importers. A calibrated approach—combining regulatory rigor with cost rationalisation—will be essential to sustain growth, competitiveness, and inclusivity in India’s industrial sector.