Govt rolls out QCOs with relaxations to safeguard MSMEs

The government has implemented Quality Control Orders (QCOs) in a phased manner, offering exemptions and relaxations to micro, small and medium enterprises (MSMEs) to ensure that domestic production is not adversely affected. This information was shared with the Lok Sabha by Minister of State for MSMEs Shobha Karandlaje in a written reply.

The Bureau of Indian Standards (BIS), functioning under the Department of Consumer Affairs, is enforcing QCOs issued by various line ministries while extending special concessions to MSMEs. To ease compliance, micro enterprises have been granted a six-month extension to meet QCO requirements, while small enterprises have been given an additional three months.

The government has also provided exemptions for certain imports. Domestic manufacturers importing inputs for export-oriented production are exempted from QCOs. In addition, imports of up to 200 units are permitted for research and development purposes. Manufacturers are also allowed to clear legacy stock—goods manufactured or imported prior to the enforcement of QCOs—within six months from the effective date of the orders.

To further support MSMEs, BIS has introduced both financial and technical relaxations in its certification processes. Annual minimum marking fees have been reduced by 80 per cent for micro enterprises, 50 per cent for small enterprises and 20 per cent for medium enterprises. An extra 10 per cent concession is available for MSMEs located in the northeastern states and for women-owned enterprises.

BIS has also relaxed laboratory requirements, making it optional for MSMEs to maintain in-house testing facilities. They may instead use BIS-recognised or NABL-accredited external laboratories, including shared or cluster-based labs. Manufacturers are now allowed to define their own inspection and testing controls under the Scheme of Inspection and Testing.

Separately, the Reserve Bank of India has advised banks to link MSME loans to external benchmarks to improve monetary policy transmission. The reset period for such loans has been reduced to three months, and banks have been asked to offer existing borrowers the option to shift to the external benchmark-linked interest rate regime.

The government has also introduced the Mutual Credit Guarantee Scheme for MSMEs, providing lenders with credit guarantee cover for term loans of up to ₹100 crore for equipment and machinery purchases. Additional measures include priority sector lending targets, collateral-free loans up to ₹10 lakh for micro and small enterprises, and minimum working capital limits for eligible borrowers.