The Government of India has introduced a risk-based compliance mechanism to ease industry compliance with Quality Control Orders (QCOs), according to the Department for Promotion of Industry and Internal Trade (DPIIT). The new framework, notified through the Transition Facilitation (Quality Control) Order, 2026, allows eligible manufacturers to follow a simplified certification route while maintaining product quality and consumer protection, DPIIT stated.
New Risk-Based Compliance Framework
The Order addresses concerns raised by several industries over difficulties in obtaining Bureau of Indian Standards (BIS) certification under existing norms. Under the new mechanism, domestic manufacturers can source supplies from companies holding licences under Scheme II of the Bureau of Indian Standards (Conformity Assessment) Regulations, 2018, instead of requiring suppliers to have Scheme I (ISI Mark) certification. According to DPIIT, the order introduces "an alternative risk-based compliance mechanism to facilitate a smooth transition for industry while maintaining quality assurance and consumer protection."
"The reform seeks to facilitate industry compliance while maintaining quality standards. By providing an alternative compliance mechanism, the Order is expected to support technological modernisation, innovation and the strengthening of India's manufacturing ecosystem," DPIIT said.
Key Differences Between Scheme I and Scheme II
| Aspect | Scheme I (ISI Mark) | Scheme II (Self-Declaration) |
|---|---|---|
| Certification type | BIS-issued licence after factory inspection | Registration based on self-declaration |
| Requirements | Factory inspections, surveillance | Self-declaration of compliance with Indian standards |
| Applicability | Required under QCOs for many products | Now acceptable alternative under the new order |
Eligibility Criteria and Benefits
Approvals under the new mechanism will be based on factors including:
- Technical capability
- Past compliance record
- Commitment to technology adoption
- Research and design capabilities
- Innovation
- Efforts to strengthen domestic supply chains
Additionally, the order extends benefits to manufacturers that have complied with Quality Control Orders continuously for three years without any default, recognizing sustained adherence to quality standards. This provision rewards long-term compliance and reduces the burden on proven performers.
Implications for Industry and Supply Chains
The initiative is expected to strengthen domestic value chains, promote technology advancement, reduce compliance bottlenecks, and improve India's integration with global supply chains while reinforcing consumer confidence in the quality and safety of products available in the domestic market, according to DPIIT. The risk-based approach allows BIS to focus enforcement resources on higher-risk entities while enabling compliant manufacturers to operate with greater flexibility.
Trade compliance officers should note that the Transition Facilitation Order, 2026, is now in effect. Manufacturers currently holding Scheme I certification may consider transitioning to Scheme II if eligible, reducing the need for recurring factory inspections. However, those without a three-year clean compliance record must still meet the additional criteria. The order does not eliminate QCO requirements but offers an alternative pathway, meaning companies must still ensure products conform to Indian standards. Customs brokers and importers dealing with BIS-regulated goods should verify whether their suppliers have opted for Scheme II certification to avoid clearance delays.
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