‘MSMEs face fresh headwinds on new machine-safety norms’

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Last Updated11/09/2024

As much as 90% of India’s 1.5 lakh machinery producers are small players, and will face cost spikes, compliance challenges, cautions GTRI

India’s Micro, Small, and Medium Enterprises (MSMEs) are facing potential challenges due to new safety regulations issued by the government.
According to a Global Trade Research Initiative (GTRI) report, the recently introduced Machinery and Electrical Equipment Safety (Omnibus Technical Regulation) Order, 2024 could lead to significant cost increases and supply disruptions for machinery and electrical equipment manufacturers.

On August 28, 2024, the Ministry of Heavy Industry (MHI) announced the new safety order that applies stringent safety standards to most machinery and electrical equipment, including pumps, cranes, and compressors.
These regulations will take effect one year from now and will require compliance for all equipment manufactured or imported into India.
While export-oriented items are exempted from the order, GTRI notes that this offers limited relief for the 1.5 lakh manufacturers in India as most serve both domestic and international markets. 90% of domestic manufacturers of the affected items are MSMEs, which will face significant pressure to comply with the new regulations.

Currently, most MSMEs adhere to ISO 9001 standards, which primarily address quality but not safety.
The new norms are far more technical, and the absence of clear implementation guidelines from the Bureau of Indian Standards (BIS) will make compliance difficult.
GTRI warns that the compliance costs could range from ₹50,000 to ₹50 lakh, depending on the machinery type and standards required.
Many smaller firms lack the advanced technology necessary to meet these new standards, making the one-year deadline nearly impossible for them.

The GTRI report, authored by Ajay Srivastava with expert input from Anil Jauhri, the former CEO of National Accreditation Board for Certification Bodies (NABCB), urges the government to delay the implementation of these regulations.
A phased approach with extended timelines and support from industry bodies is recommended to help MSMEs adapt to the new safety norms.
Without such measures, many smaller firms could be forced to shut down due to the financial and technical barriers to compliance.