Most companies in 10 product categories just got a supply-chain policy they haven't read yet.
The Real Story in One Paragraph
On 25 June 2026, DPIIT issued the Transition Facilitation (Quality Control) Order, 2026 (S.O. 3417(E)) — a Gazette notification that creates a flexible domestic sourcing framework for 10 major product categories. DPIIT-permitted companies can now procure from manufacturers holding BIS Scheme II (Self-Declaration of Conformity) licenses, instead of requiring all suppliers to carry the ISI Mark (Scheme I). This breaks the ISI-only sourcing bottleneck, rewards companies with strong compliance track records, and directly strengthens Atmanirbhar Bharat by incentivising domestic supply-chain investment.
It is a flexible domestic sourcing mechanism — and understanding the difference matters. Scheme II (SDoC) does not require a mandatory factory audit; products carry a BIS SDoC mark. It is simpler and faster, and already used for 73+ electronics and IT products.
Background: How QCOs Reshaped Indian Industry
India's Quality Control Orders have expanded dramatically — from 14 QCOs in 2014 to over 187 by 2025, covering more than 679 product categories. The impact on industry has been decisive:
- Toys: imports declined 52% while exports surged 239% between FY 2014-15 and FY 2022-23 — India went from net importer to net exporter.
- Footwear: global brands including Nike, Adidas, Puma, Crocs and New Balance now manufacture in India; Tamil Nadu has emerged as a major hub.
- Air Conditioners: 84 companies committed over ₹10,000 crore in domestic manufacturing, targeting ₹1.7 lakh crore in production.
- Furniture: the Furniture QCO (effective Feb 2026) triggered its own amendment cycle, including MSME exemptions and R&D import carve-outs.
But rapid expansion also created supply-chain friction. The ISI Mark (Scheme I) requires BIS factory audits, pre-market inspection, and renewal cycles — a process that can take 5–6 months per supplier. The Transition Facilitation Order directly addresses this bottleneck.
What the Order Does: The Two-Party Framework
This is not a self-certification route for end-product manufacturers. It is a supply-chain sourcing mechanism with two distinct roles:
Step 1 — DPIIT Grants Permission to the Buyer / Brand
An eligible company (the brand, assembler, or OEM) applies to DPIIT. An Implementation Committee — comprising senior officials from DPIIT, Consumer Affairs, Commerce, DGFT, and BIS — conducts a risk-based assessment and, if satisfied, grants specific permission to the company.
Step 2 — BIS Grants Scheme II License to the Supplier / Manufacturer
Once permission is in place, BIS can issue a Scheme II (SDoC) license to the component manufacturer supplying that permitted company — no mandatory factory audit, faster to market.
The 10 Categories
Covered under the Transition Facilitation Order, 2026
Who Benefits — And Who Doesn't
| Benefits | Limitations |
|---|---|
| Domestic brands & OEM assemblers who source components locally | LLPs, partnerships, sole proprietors — Companies Act 2013 incorporation is mandatory |
| Component manufacturers — Scheme II (SDoC, no factory audit) to supply permitted companies | Foreign manufacturers cannot apply directly — must operate via an incorporated Indian entity |
| Companies with 3+ years of clean QCO compliance — explicitly rewarded | Not a finished-goods import route — it strengthens domestic B2B supply chains |
| R&D-led companies investing in India design & technology capability | Permission is revocable if conditions are breached or products fail Indian Standards |
The Clock
Application window: 24 months from 25 June 2026 · Order validity: 5 years · Guidelines & application process: dpiit.gov.in (to be published). Permission is revocable if conditions are breached or products fail Indian Standards.
If you need to understand your eligibility or build the application dossier — compliance history, supply-chain documentation, and India-commitment plans — that's exactly what we do. Talk to our BIS & QCO team.