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New Import Rules Put MSMEs at Risk

Tough Quality Norms Hit MSMEs, Threaten Supply Chains

By Pratishtha Sehgal --
Saturday, 15 Mar, 2025

India’s small manufacturing sector is bracing for a significant challenge as new Quality Control Orders (QCOs) for fasteners, including nuts and bolts, come into effect next week. While the move aims to improve quality and safety standards, it may lead to a halt in imports, disrupt supply chains, and threaten the survival of many MSMEs.

According to the Global Trade Research Initiative (GTRI), the new regulations mandate that all imported fasteners must have Bureau of Indian Standards (BIS) certification. While this ensures product quality, it places immense pressure on small businesses that depend on imported fasteners for critical industries such as automobiles, electronics, railways, and heavy machinery. The BIS certification process is costly and time-consuming, making it difficult for foreign manufacturers to comply. As a result, many Indian MSMEs relying on these imports may face production delays, increased costs, and potential shutdowns.

The QCOs could also push manufacturers to procure fasteners from domestic sources at higher prices, reducing their competitiveness. The industry fears that larger players will benefit, leading to monopolization, while MSMEs struggle to adapt. Additionally, customers may seek alternative solutions, impacting businesses that fail to meet the new quality norms.

Amid these concerns, the government has launched three initiatives under the Steel Research Technology Mission of India (SRTMI) to boost R&D in steel manufacturing. Union Minister Bhupendra Yadav emphasized that these initiatives will drive innovation and sustainability in the sector. However, MSMEs argue that while long-term development is important, they need immediate relief measures to navigate the stricter quality regulations.

The phased implementation timeline—June 20 for large firms and September 20 for MSMEs—offers some breathing room, but industry experts believe a more flexible approach is necessary. The government must consider financial support, an extended transition period, and a simplified certification process to prevent disruptions. If not addressed, these stringent regulations could weaken India’s MSME sector, which is the backbone of the country’s economy, leading to job losses and reduced industrial output.

While quality enforcement is essential, balancing it with the needs of small businesses is crucial for sustaining growth and innovation in India’s manufacturing ecosystem.

Tough Quality Norms Hit MSMEs, Threaten Supply Chains. India’s small manufacturing sector is bracing for a significant challenge as new Quality Control Orders (QCOs) for fasteners, including nuts and bolts, come into effect next week. While the move aims to improve quality and safety standards, it may lead to a halt in imports, disrupt supply chains, and threaten the survival of many MSMEs.

According to the Global Trade Research Initiative (GTRI), the new regulations mandate that all imported fasteners must have Bureau of Indian Standards (BIS) certification. While this ensures product quality, it places immense pressure on small businesses that depend on imported fasteners for critical industries such as automobiles, electronics, railways, and heavy machinery. The BIS certification process is costly and time-consuming, making it difficult for foreign manufacturers to comply. As a result, many Indian MSMEs relying on these imports may face production delays, increased costs, and potential shutdowns.

The QCOs could also push manufacturers to procure fasteners from domestic sources at higher prices, reducing their competitiveness. The industry fears that larger players will benefit, leading to monopolization, while MSMEs struggle to adapt. Additionally, customers may seek alternative solutions, impacting businesses that fail to meet the new quality norms.

Amid these concerns, the government has launched three initiatives under the Steel Research Technology Mission of India (SRTMI) to boost R&D in steel manufacturing. Union Minister Bhupendra Yadav emphasized that these initiatives will drive innovation and sustainability in the sector. However, MSMEs argue that while long-term development is important, they need immediate relief measures to navigate the stricter quality regulations.

The phased implementation timeline—June 20 for large firms and September 20 for MSMEs—offers some breathing room, but industry experts believe a more flexible approach is necessary. The government must consider financial support, an extended transition period, and a simplified certification process to prevent disruptions. If not addressed, these stringent regulations could weaken India’s MSME sector, which is the backbone of the country’s economy, leading to job losses and reduced industrial output.

While quality enforcement is essential, balancing it with the needs of small businesses is crucial for sustaining growth and innovation in India’s manufacturing ecosystem.