Government Implements Quality Control Orders with MSME-Friendly Relaxations to Safeguard Domestic Production

The Government of India is implementing Quality Control Orders (QCOs) in a phased manner with specific exemptions and relaxations for Micro, Small and Medium Enterprises (MSMEs) to ensure that domestic production remains unaffected. These measures are being carried out through the Bureau of Indian Standards (BIS) under the Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution.

To reduce compliance pressure on MSMEs, the government has provided additional time for adherence to QCOs—six months for micro enterprises and three months for small enterprises. Exemptions have also been granted for imports used in export-oriented production, import of up to 200 units for research and development purposes, and clearance of legacy stock manufactured or imported prior to QCO implementation within six months of the effective date.

In response to industry feedback, BIS has introduced several financial and technical relaxations. MSMEs are being supported through substantial concessions in the annual minimum marking fee—80% for micro enterprises, 50% for small enterprises and 20% for medium enterprises. An additional 10% concession is available for MSMEs located in the North-Eastern region and women-led enterprises.

Further easing compliance, BIS has made in-house laboratories optional for MSMEs. Units can now rely on BIS-recognised, NABL-accredited or shared cluster-based laboratories. Manufacturers are also given flexibility in defining control units, batches and inspection levels under the Scheme of Inspection and Testing. To promote transparency, BIS has published product certification guidelines and product-wise conformity manuals on its official website.

On the financial front, the Reserve Bank of India has advised banks to link MSME loans to external benchmarks to improve monetary policy transmission, with loan reset periods reduced to three months. Existing borrowers have also been given the option to switch to the external benchmark-linked interest rate regime.

To further enhance credit flow, the government has launched the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), offering credit guarantee cover for term loans up to ₹100 crore for equipment and machinery purchases. Banks have been mandated not to demand collateral for loans up to ₹10 lakh for MSEs, while working capital requirements are fixed at a minimum of 20% of projected annual turnover for limits up to ₹5 crore.

These measures, shared by Minister of State for MSME Sushri Shobha Karandlaje in a written reply in Lok Sabha, underscore the government’s commitment to strengthening MSMEs while maintaining quality standards and improving access to finance.