India's DGFT Notification Sparks Debate: Exemptions for QCOs for chemicals cosmetics and dyes in Export Sector

On March 7, 2024, India’s Directorate General of Foreign Trade (DGFT) published notification 69/2023. The notification explains the provisions for the import of inputs that are subjected to mandatory Quality Control Orders (QCOs) by advance authorization (AA) holders and registered export-oriented units (EOUs).

The DGFT has announced exemptions for duty-free imports of goods for final exports, including those in special economic zones (SEZs) and EOUs. However, goods not used for export production will be destroyed by customs officials.

CHEMEXCIL, India's trade body council that represents basic chemicals, cosmetics, and dye exporters, has been consulting with its members regarding this initiative.

While the CHEMEXCIL secretariat has expressed support for the DGFT notification allowing the import of items without mandatory QCOs under AA and SEZ schemes, industry representatives have advocated for mandatory QCOs for all imports, requesting detailed representation.

In a consultation that closed on March 28, 2024, CHEMEXCIL members were asked to share their views on the following questions for onward submission. 

• Do we support the current notification allowing import of specific items without mandatory QCOs under AA and EOU please provide the reasons?

• Are there any concerns regarding potential quality issues due to this policy?

• If we support mandatory QCOs for all imports, then please provide your rationale.