MSME Sustainable (ZED) Certification Scheme: Charting a Path for Quality and Sustainability in Indian MSMEs
Micro, Small & Medium Enterprises (MSMEs) have always been the backbone of an economy in general and secondary sector in particular. For a developing country like India, MSMEs are considered as panacea for several economic woes like unemployment, poverty, income inequalities and regional imbalances.
In India, MSMEs have played a great role in ensuring the socialistic goals like equality of income and balance regional development as envisaged by the planners soon after the independence. With the meagre investment in comparison to the various large scale private and public enterprises, the MSMEs are found to be more efficient providing more employment opportunities at relatively lower cost.
There are approximately 63.4 million MSME units registered across India on the Udyam and Udyam Assist platforms, collectively providing employment to about 26.77 crore people. The MSME sector now contributes nearly 30% to India’s GDP, accounts for around 35.4% of the country’s total manufacturing output, and contributes approximately 45.7% to India’s total exports, underscoring its vital role in driving inclusive and sustainable economic growth.
In an era of rapid globalization, changing market dynamics, and increasing environmental concerns, Indian MSMEs face unprecedented challenges to remain competitive and sustainable. To help these enterprises become globally competitive while remaining environmentally responsible, the Ministry of MSME, Government of India introduced the MSME Sustainable (ZED) Certification Scheme — an initiative designed to build a culture of excellence, quality, and green sustainable manufacturing across India’s MSME ecosystem.
The Zero Defect Zero Effect (ZED) concept was first coined by the Hon’ble Prime Minister of India, Shri Narendra Modi, during his Independence Day address in 2014. He urged Indian industries, especially MSMEs, to produce goods with “zero defects” so that products meet international quality standards and are never returned from foreign markets, and with “zero effect” on the environment to ensure sustainable industrial growth.
The scheme is designed not just as a certification, but as a journey – enabling MSMEs through awareness, assessment, handholding, incentives, and upgradation support so they can climb levels toward excellence.
The ZED Certification Model recognises MSMEs at 3 levels — Bronze, Silver, and Gold. Each level signifies the maturity of the enterprise’s quality and sustainability systems. MSMEs can apply for any of these levels based on their preparedness.
To make ZED adoption easier for the MSMEs, the government provides substantial financial support. Under the scheme, micro enterprises receive up to 80% subsidy, small enterprises 60%, and medium enterprises 50% on the cost of certification. Additional incentives are available for women-led enterprises, SC/ST entrepreneurs, and units located in the North Eastern Region, Jammu & Kashmir, Ladakh, and the Andaman & Nicobar Islands. The government also provides financial support to the MSMEs towards product testing/management system certification/product certification. This holistic support system ensures that even small units with limited resources can embark on their ZED journey.
The benefits of ZED Certification are multi-dimensional. For the enterprise, it results in enhanced product quality, reduced rejection rates, lower costs through efficient resource utilization, and improved brand image. The scheme’s subsidies reduce the certification cost burden, while support for technology upgrades and consultancy helps firms cross capability gaps.
ZED-certified units gain increased trust among customers and also opens doors to various financial incentives, lower interest rates from banks that recognize ZED certification as a mark of excellence. On a broader scale, the ZED initiative contributes to environmental protection by promoting cleaner production methods, efficient energy use, and reduction of industrial waste — supporting India’s commitment to sustainable development goals (SDGs) and the vision of an Atmanirbhar Bharat.
In conclusion, the MSME Sustainable (ZED) Certification Scheme is a visionary initiative that aligns with India’s goals of industrial competitiveness, environmental sustainability, and self-reliance. It encourages MSMEs to embrace modern manufacturing practices, enhance product quality, and operate with greater efficiency and responsibility. As India continues its journey toward becoming a global manufacturing hub, the ZED Scheme serves as a catalyst for transformation — helping MSMEs evolve from being small players to becoming world-class, sustainable enterprises that embody the spirit of Zero Defect, Zero Effect.
From
Manik Gupta, Deputy Director
Veer Bahadur Rai, Coordinator
Quality Council of India, New Delhi