MSMEs unaware of quality control norms may dent India's manufacturing vision
Even though the government continues to push for stronger product standards, there is still an awareness gap about the quality control order norms that need to be addressed.
About 16–19% of Indian micro, small and medium enterprises (MSMEs) are not aware of the Quality Control Orders (QCOs) introduced by the Department for Promotion of Industry and Internal Trade (DPIIT) under the AtmaNirbhar Bharat initiative, suggests the MSME Outlook Survey (July-September 2025) by Small Industries Development Bank of India (SIDBI).
The DPIIT has been issuing QCOs since 1987, covering various products under the Bureau of Indian Standards (BIS) Act. However, in 2020, the DPIIT increased its focus on a quality control regime across products, in line with the Aatmanirbhar Bharat initiative and the ethos of Zero Defect, Zero Effect (ZED) initiative to encourage manufacturing quality.
In December 2022, the DPIIT announced a plan to bring 50 products across 16 categories under mandatory QCOs by mid-2023.
However, even though the government continues to push for stronger product standards, there is still an awareness gap about the QCO norms that need to be addressed. And this knowledge gap could expose smaller firms, particularly those in informal clusters, to future compliance risks and penalties.
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Cost challenge
While designed to raise product quality, increase reliability and ensure safety standards for MSMEs, the new compliance ecosystem has also brought in a surge in operational costs, certification expenses, and procedural complexities.
For MSMEs manufacturing regulated product categories—steel, chemicals, plastics, furniture, and electronics—the financial and administrative costs of compliance have risen sharply.
According to the MSME Outlook Survey, the impact is most noticeable in the manufacturing and trading sectors, where businesses now have to invest in product testing and certification through BIS, and also allow for quality audits.
Close to 31% of manufacturing MSMEs and 37% of trading enterprises have reported being directly impacted by QCOs, primarily due to higher compliance costs and time-intensive certification.
As much as 48% of respondents in the manufacturing segment reported increased input costs (tied to documentation), certification renewals, and inspection schedules. On the other hand, only 22% (compared to 27% last quarter) of companies reported improving margins. Around 37% respondents said their sourcing or sales cycles have been disrupted, with some reporting longer turnaround times for shipments and deliveries.
Around 26% respondents from the services sector (design, packaging, logistics, and other supporting functions’ businesses) reported being impacted too.
Despite the cost implications, the QCO framework is a long-term investment in India’s industrial credibility. It aims to eliminate substandard manufacturing and enable MSMEs to compete in international markets where certification and traceability are prerequisites.
While the cost of immediate compliance may pinch smaller manufacturers, it also sets the foundation for a globally competitive, quality-conscious MSME ecosystem.
Edited by Kanishk Singh