The Directorate General of Foreign Trade (DGFT) has granted an exemption to certain imported goods from quality control orders (QCOs) under the advance authorisation scheme. This exemption applies to items such as viscose staple fibre, but only on being used in products destined for export, not for the domestic market.
Initially covering QCOs from the Ministry of Steel and DPIIT, the exemption has now been extended to include those from the Ministry of Textiles. This decision follows a meeting where the Ministry of Commerce and Industry rejected a blanket exemption, opting instead for a sector-wise analysis and the formation of small committees to address concerns.
The recent notification specifies that the exemption is conditional on the imported goods being used solely for manufacturing export products. Export-oriented units (EOUs) and units in Special Economic Zones (SEZ) are also eligible for this exemption, provided they meet the pre-import conditions.
This move aims to alleviate the challenges faced by exporters in accessing specific input materials. Some buyers stipulate the source of materials, leaving exporters with limited options. Exemption from QCOs ensures smoother import processes, benefiting both exporters and suppliers.
The exemption process involves consultation with relevant ministries and the Bureau of Indian Standards (BIS), with safeguards in place to prevent misuse, such as penalties for non-compliance.
Earlier concerns raised by industry associations, particularly regarding the VSF QCO affecting viscose staple fiber imports, have prompted action. The recent notification is welcomed by textile industry representatives who believe it will enhance textile exports.
However, calls for similar exemptions for other products covered by QCOs, such as polyester fibre, highlight ongoing industry needs. The rationale behind QCOs is to regulate the import of inferior quality goods, primarily from specific countries like China and ASEAN nations.
Under the advance authorisation scheme, exporters must utilise imported input goods within 18 months, with penalties for non-compliance. Unutilised goods beyond this period must be destroyed, with additional financial obligations imposed on the authorisation holder.
