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A Guide on Starting MSME in India - Part VI

Updated on June 4, 2010


Every MSME has to comply with various regulations in force. These include regulatory, taxation, environmental and certain product specific clearances. This section looks into the methodology of obtaining these approvals and clearances.

Exemption from Compulsory License

In MSME, there are virtually no licensing restrictions. No industrial license is required except in case of 6 product groups included in compulsory licensing (these products groups mainly cover products that can only be made in large sector.)

But if a small-scale unit employs less than 50/100 workers with/without power then it would not require a license from the Govt. of India even for the 6 product groups covered in licensing under Schedule II of the notification.

Subject to this, an entrepreneur can set up a SSI unit anywhere in the country without any restriction. The units are, of course, subject to the location/land use and zoning restrictions in force under the local laws.


An entrepreneur has to obtain several clearances or permissions depending upon the nature of his unit and products manufactured

Regulatory or Taxation Clearances

  • Registration under Sales Tax Act - Commercial Tax officer of area concerned
  • Registration under Central Excise Act - Collector of Central Excise or his nominee for area
  • Payment of Income Tax - ITO of the area concerned
  • Registration of Partnership deed - Inspector General of area concerned
  • Calibration of weights & measures - Weights and Measures Inspector of State
  • Power Connection - Designated Officer of State Electricity Board
  • Employee strength exceeding 10 with power connection or 20 without power - Chief Inspector of Factories

Environment & Pollution Related Clearances

The method of granting consent under water and air pollution to MSMEs has been simplified. Except for 17 critically polluting sectors given below, in all other cases MSMEs will merely have to file an application and obtain an acknowledgement which will serve the purpose of consent:-

  1. Sugar
  2. Fertilizer (Nitrogen/Phosphate)
  3. Cement
  4. Fermentation & Distillery
  5. Aluminium

6. Petrochemicals

7. Thermal Power

8. Oil refinery

9. Sulphuric Acid

10. Tanneries

11. Copper smelter

12. Zinc smelter

13. Iron & Steel

14. Pulp & Paper

15. Dye and Dye intermediates

16. Pesticides manufacturing and formulation

17. Basic Drugs and Pharmaceuticals


Product Specific Clearances

1. Establishing a Printing Press - District Magistrate

2. License for Cold Storage Construction - Designated Official in State

3. Pesticides - Central/State Agricultural Department - Ministry of Agriculture

4. Drugs and Pharmaceuticals - Drug license from State Drug Controller

5. Safety Matches/ Fireworks - License under Explosives Act from Directorate of Explosives, Nagpur

6. Household Electrical Appliances - License from Bureau of Indian Standards

7. Wood Working Industry within 8 km from forest - District Forest Officer

8. Milk Processing & Milk products manufacturing units - Approval under Milk and Milk Products Order from State Agricultural/ Food Processing Industries Department above a designated capacity.


 Quality Certification

Quality certification has become extremely important in competitive markets and especially in gaining foothold in exports. To avail the certification of ISO-9000, a unit has to undertake significant costs; the small scale industries have been found wanting mainly on account of resource crunch to implement quality systems to obtain this certification. However, as a paradigm shift, MSME must make 'Quality' a way of life.


It has been decided to push the quality upgradation programme in the MSME Sector in a big way. A scheme has been launched to give financial incentive to those MSME units who acquire ISO-9000 certification, by reimbursing 75% of their costs of obtaining certification, subject to a maximum of Rs. 0.75 lacs per unit.


In order to promote modernization and technology upgradation in MSME, the units are assisted in improving the quality of their products. A new scheme has been launched to assist the units in obtaining ISO-9000 or an equivalent international quality standard. Subject to an upper ceiling of Rs. 075 lacs, each unit is given financial assistance equal to 75% of the costs incurred in acquiring the quality standard. The MSME units are also encouraged to participate in quality awareness and learning programmes organised specially for their benefit.

ISO Certification

ISO (International Organisation for Standardisation) is responsible for the promotion and development of international standards and related activities, including conformity assessments such as testing, inspection, laboratory accreditation, certification and quality standards.

The ISO 9000 series standards have been adopted by some 45 countries and its equivalent standard in the Indian context is the Bureau of Indian Standards' (BIS) 14000 series. In the United States, the series is known as the ANSI/ASQC Q 9000 series.

National Accreditation Council for Certification Bodies (NACCB) is the major accrediting body in India. BVQI and DNV have started operations in India. In addition to the registrars, the number of people providing ISO related services such as consultancy on ISO implementation and lead assessor courses is also showing exponential growth. Apex industry associations such as the CII (Confederation of Indian Industry) have also started providing services such as the lead assessor course.

SIDO provides an scheme on quality upgradation/environment management for small scale sector, the application format to fill up the form to register as ISO 9000 certified unit.


Bar Coding is a series of parallel vertical lines (bars and space), that can be read by bar code scanners. It is used worldwide as part of product packages, as price tags, carton labels, on invoices even in credit card bills. The bar code become unique and universal and can be recognized anywhere in the world.

The detailed of scheme with the relevant registration forms are available on our website at: or or and also at GS1 India's website . All the Micro and Small manufacturing enterprise who have adopted bar code certificates, are advised to apply for it at the earliest and avail of this financial assistance.

 Patents and trademarks



Intellectual Property Rights are legal rights, which result from intellectual activity in industrial, scientific, literary & artistic fields. These rights Safeguard creators and other producers of intellectual goods & services by granting them certain time-limited rights to control their use. Protected IP rights like other property can be a matter of trade, which can be owned, sold or bought. These are intangible and non-exhausted consumption.



         a. Patents.

         b. Trademarks.

         c. Copyrights and related rights.

         d. Geographical Indications.

         e. Industrial Designs.

         f. Trade Secrets.

         g. Layout Design for Integrated Circuits.

         h. Protection of New Plant Variety.


a. Patent

A patent is an exclusive right granted for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem. It provides protection for the invention to the owner of the patent. The protection is granted for a limited period, i.e 20 years. Patent protection means that the invention cannot be commercially made, used, distributed or sold without the patent owner's consent. The patent owner may give permission to, or license, other parties to use the invention on mutually agreed terms. The owner may also sell the right to the invention to someone else, who will then become the new owner of the patent.


b. Trademarks:

A trademark is a distinctive sign that identifies certain goods or services as those produced or provided by a specific person or enterprise. It may be one or a combination of words, letters, and numerals. They may consist of drawings, symbols, three- dimensional signs such as the shape and packaging of goods, audible signs such as music or vocal sounds, fragrances, or colours used as distinguishing features. It provides protection to the owner of the mark by ensuring the exclusive right to use it to identify goods or services, or to authorize another to use it in return for payment.


It helps consumers identify and purchase a product or service because its nature and quality, indicated by its unique trademark, meets their needs. Registration of trademark is prima facie proof of its ownership giving statutory right to the proprietor. Trademark rights may be held in perpetuity. The initial term of registration is for 10 years; thereafter it may be renewed from time to time.


c. Copyrights and related rights:

Copyright is a legal term describing rights given to creators for their literary and artistic works. It is not mandatory to register. Registering a copyright provides evidence that copyright subsists in the work and creator is the owner of the work.


Creators often sell the rights to their works to individuals or companies best able to market the works in return for payment. These payments are often made dependent on the actual use of the work, and are then referred to as royalties.


d. Geographical Indications (GI):

GI are sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin. A geographical indication points to a specific place or region of production that determines the characteristic qualities of the product that originates therein. It is important that the product derives its qualities and reputation from that place. Place of origin may be a village or town, a region or a country.


Recently the GIs of goods like Chanderi Sarees, Kullu Shawls, Tirunelveli Halwa, etc have been registered. Keeping in view the large diversity of traditional products spread all over the country, the registration under GI will be very important in future growth of the tribes / communities / skilled artisans associated in developing such products.


e. Industrial Designs:

Industrial designs refer to creative activity, which result in the ornamental or formal appearance of a product, and design right refers to a novel or original design that is accorded to the proprietor of a validly registered design. Industrial designs are an element of intellectual property.


f. Trade Secrets:

It is the confidential business information that provides an enterprise a competitive edge may be considered a trade secret. Usually these are manufacturing or industrial secrets and commercial secrets, which include sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. Trade secrets are protected without registration.


g. Layout Design for Integrated Circuits:

Semiconductor Integrated Circuit means a product having transistors and other circuitry elements, which are inseparably formed on a semiconductor material or an insulating material or inside the semiconductor material and designed to perform an electronic circuitry function.


The main focus of SICLD Act is to provide for routes and mechanism for protection of IPR in Chip Layout Designs created and matters related to it. The Act empowers the registered proprietor of the layout-design an inherent right to use the layout-design, commercially exploit it and obtain relief in respect of any infringement. Department of Information Technology Ministry of Communications and Information Technology is the administrative ministry looking after its registration and other matters.


h. Protection of New Plant Variety:

This act recognizes the role of farmers and conservers and the contribution of traditional, rural and tribal communities to the country's agro biodiversity by rewarding them for their contribution and to stimulate investment for R & D for the development new plant varieties to facilitate the growth of the seed industry. Department Agriculture and Cooperation is the administrative ministry looking after its registration and other matters.


Following is the list of certifying bodies that have been accredited by NABCB for ISO 9000 certification (QMS) and ISO14001 (EMS). Expenses made by the SSI units in obtaining the corresponding certificates from these Certifying Bodies with the logo of NABCB on the certificate alone will be considered for reimbursement.


List of Certification Bodies:

For QMS Certification



-       BVQI (India) Pvt.Ltd. 

-       Bureau of Indian Standards 

-       Intel Quality Certification Pvt.Ltd.


-       Det Norske Veritas ,Certification Services, India 


-       Indian Register Quality Systems 


-       TUV India Pvt.Ltd.


-       American Global Standards India 


-       ICS Certifications(Asia) Pvt.Ltd.


-       ICRS Management Systems Pvt.Ltd. 

-       BSI India Pvt.Ltd.


-       TUV Rheninland India Pvt.Ltd.

-       TUV Suddeutschland (India)Pvt.Ltd. 


-       NVT Quality Certification Pvt. Ltd.


-       AQSR India Pvt.Ltd. 


-       American Quality Assessors India Pvt.Ltd.


-       URS Certification Ltd. 


-       ICL Certifications Ltd.


-       Transpacific Certifications Ltd. 


-       Knowledge Partner QR Pvt.Ltd.


-       QMS Certification Services Pvt.Ltd.


-       Lloyd’s Register Quality Assurance Ltd.(India Branch)


-       Vexil Business Process Services Pvt.Ltd.


-       NQA Certifications India Pvt.Ltd.


-       NQA Certifications India Pvt.Ltd.


-       QSS Quality Management Services


-       QSI (India Certifications Pvt.Ltd.)


-       RINA India Pvt.Ltd.

-       SGS India Pvt.Ltd.


-       Global Certification Services.



For EMS Certification



-       International Certification Services (Asia)Pvt.Ltd. 


-       BVQI (India) Pvt.Ltd. /Bureau Veritas Quality Certification Pvt.Ltd 


-       Indian Register of Shipping (Indian Register Quality Systems) 


-       Det Norske Veritas, Certification Services, India 


-       TUV India Pvt.Ltd. 


-       NVT Quality Certification Private Ltd.


-       Lloyd’s Register Quality Assurance Ltd.(India Branch)


-       Vexil Business Process Services Pvt.Ltd.


-       TUV South Asia Pvt.Ltd.


-       AQSR India Pvt.Ltd.


NQAQSR Certification Pvt.Ltd.


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    • profile image

      iso 9000 

      7 years ago

      I read your post . it was amazing.Your thought process is wonderful.

      The way you tell about things is awesome. They are inspiring and helpful.Thanks for sharing your information and stories.

      iso 9000


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