Fastener Crisis: Quality Order Sparks Trade Wars

Fastener traders have urged the government to withdraw a new quality control order (QCO), stating it is causing significant cost increases, supply reductions, and production disruptions nationwide. The QCO imposes a rigid "one-product-one-licence" system, which traders argue is ill-suited for the high variety and small batch production of fasteners, leading to duplication, delays, and uncertainty.

This regulatory change has reportedly halved the turnover of some firms, with continued delays posing a risk of closure. Compounding these issues are port delays stemming from Harmonised System (HS) code confusion, further increasing uncertainty and transaction costs. Fasteners, essential for sectors like automotive, construction, and electronics, are imported in large volumes, primarily from China, Japan, and South Korea.

The QCO, issued in 2023 by the Department for Promotion of Industry and Internal Trade (DPIIT), mandates BIS certification for imported fasteners. Think tank GTRI highlighted that while fasteners constitute a small fraction of final product costs, their unavailability can halt entire production lines. Restricting trade in these vital inputs raises overall production costs and undermines India's manufacturing competitiveness.