In a major regulatory relief for domestic manufacturing and import-dependent industries, the Department for Promotion of Industry and Internal Trade (DPIIT) has notified the Transition Facilitation (Quality Control) Order, 2026.
The sweeping directive temporarily relaxes the most rigid enforcement mechanisms of mandatory Quality Control Orders (QCOs) across 10 distinct product categories, including toys, air conditioners, furniture, personal protective equipment (PPE), footwear, and electrical appliances.
The reform acts as a 5-year transitional buffer, stepping away from strict compliance policing to prevent severe supply-chain bottlenecks and keep production running smoothly.
1. The Core Shift: Factory Audits vs. Self-Declaration
The new policy tackles the biggest roadblock facing Indian manufacturers and importers: the long, arduous process of securing Bureau of Indian Standards (BIS) certifications. The 2026 order changes the playing field by introducing a multi-tiered compliance path:
- The Legacy Rigor (Scheme I): Under strict QCO rules, companies were forced to comply under Scheme I. This meant production lines could not roll, and components could not be cleared at ports, until BIS officials physically inspected manufacturing plants (domestic or foreign), conducted surveillance audits, and officially granted an ISI Mark license.
- The New Alternate Path (Scheme II): The 2026 rule allows selected companies to procure components and materials under Scheme II. Scheme II relies on a risk-based self-declaration of compliance by the manufacturer. Businesses can state their products meet Indian standards without waiting for months of bureaucratic factory inspections.
[Old Framework: Scheme I] ──► Compulsory Factory Inspection ──► Delays, Port Stagnation & Supply Chain Freezes
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▼ (June 2026 Transition Order)
[New Framework: Scheme II] ──► Risk-Based Self-Declaration ──► Fast-Track Clearing & Component Sourcing
2. Why the Government Had to Pull Back
While the push for universal QCOs since 2020 was meant to elevate the “Make in India” brand and block low-quality cheap imports (particularly from China), the real-world execution triggered severe industrial friction.
A high-level review led by a government committee realized that blanket QCO enforcement was inadvertently hurting domestic manufacturing. Because Indian businesses import specialized sub-components (like specific micro-hinges for furniture, or custom compressors for ACs) in massive volumes from global suppliers, blocking those parts over a lack of physical BIS factory audits stalled downstream production lines entirely. The 2026 order steps in to ease these raw material and component import logjams.
3. The Rules of Engagement: Who Qualifies?
The government isn’t dismantling its quality standards completely; instead, it is shifting to an earned-trust model. To bypass the rigid Scheme I requirements and use the self-declaration route, companies must apply to a newly formed, high-powered DPIIT Special Committee (consisting of representatives from the Ministry of Commerce, Consumer Affairs, DGFT, and the BIS).
The panel will grant the easier Scheme II permissions based on a balanced scorecard:
| Evaluation Metric | Requirements for Relaxation Eligibility |
| Compliance History | Companies must demonstrate an unblemished quality control record. |
| Sustained Adherence | The order automatically extends its benefits to manufacturers who have successfully complied with QCO requirements for 3 continuous years without a single default. |
| Local Value Commitment | Businesses must show clear technical capability and a formal commitment toward funding localized R&D, structural design, and scaling up domestic supply-chain capacity. |
4. Timeline and Scope
The Transition Facilitation Order is officially locked as a five-year temporary window. However, the individual licenses granted by the committee under this flexible framework will initially be valid for two years, subject to rolling renewals based on continuous performance audits.
By offering this operational breathing room to critical sectors like consumer electronics, footwear, and toys, the government aims to lower crushing compliance overheads and give the Indian manufacturing ecosystem time to organically mature without grinding factory floors to a halt.
