CHENNAI: Industries Minister TRB Rajaa on Friday welcomed the union government’s decision to revoke the Quality Control Orders (QCOs) on polyester fibre and yarn, a long-standing demand of Tamil Nadus textile sector.
“Removing the QCOs will help mills source raw materials at globally benchmarked prices and restore cost competitiveness in a sector where every rupee counts. It was part of our Kovai Rising 2024 election manifesto,” Rajaa said in his post.
The centre on Thursday decided to roll back QCOs on key industrial inputs in textiles, plastics and mining to increase the availability of intermediate goods used as inputs in manufacturing. The move is expected to lower the cost of production and ease supply the chain for lakhs of SMEs.
QCOs made Bureau of Indian Standards' certification mandatory for a whole lot of intermediate goods which led to cost escalation and left Indian manufacturers at a disadvantage compared to countries like Bangladesh and Vietnam.
Rajaa said he had reiterated the industry's concerns to Union Commerce and Industry Minister Piyush Goyal just two days ago. "The minister responded positively, and this move comes as relief for thousands of MSMEs and lakhs of workers," he said.
S K Sundararaman, former chairman of SIMA, said QCO created supply bottlenecks, raised input costs, and reduced India's competitiveness in global textile markets.
Tamil Nadu, which is India’s largest textile and apparel manufacturing hub, is also set to benefit significantly from the Export Promotion Mission (EPM) announced recently by the centre to strengthen export competitiveness. With its extensive MSME ecosystem, integrated textile value chain and skilled labour pool, the state is well placed to leverage both the financial and non-financial components of the mission, said Dr A Sakthivel, Vice-Chairman of the Apparel Export Promotion Council (AEPC).
Under Niryat Protsahan, the mission's financial arm, interest subvention and enhanced credit access are expected to ease working capital pressure in textile manufacturing clusters such as Tiruppur, Coimbatore, Erode, Karur, and Salem.
"Affordable finance will help sustain orders, modernise units and improve liquidity for small exporters," Sakthivel said.
Niryat Disha, the mission's non-financial pillar, will provide support in market access, branding, logistics, participation in international fairs and compliance processes through a unified digital platform.
Israr Ahmed, director of Farida Prime Tannery, said the timing is significant as the leather industry is still adjusting to trade uncertainty following recent tariff actions by US President Donald Trump. Interest subvention and the ability to borrow up to 20% more without additional collateral will help stabilise operations, he said.
Abdul Wahab, MD of KH Shoes, said exporters welcome the EPM, particularly the long-awaited interest subvention scheme. With business down 10%-15% due to US tariffs and discounts no longer sustainable, measures such as market access support, brand building, credit guarantees and inland transport assistance will help revive exports, he said.