INDUSTRIAL
SAFETY NORMS - ECONOMY
News: The
Global Trade Research Initiative (GTRI) report stated that the new safety
regulations for machinery and electrical equipment will affect domestic
production by the MSME segment.
What’s
in the news?
Background
- Recently the Machinery and
Electrical Equipment Safety (Omnibus Technical Regulation) Order, 2024, was
introduced by the Ministry of Heavy Industry (MHI), which is set to take
effect on August 28, 2025.
- These regulations bring in stringent
safety standards for machinery and electrical equipment
manufactured or imported into India, aimed at aligning Indian
safety practices with global norms.
- The new rules are expected to have
far-reaching consequences for the Micro, Small, and Medium
Enterprises (MSMEs), which make up 90 per cent of the estimated
1,50,000 manufacturers that will be affected.
Key
points of new safety norms
- The norms introduce three
levels of stringent safety standards for machinery and electrical
equipment manufactured or imported into India.
- These regulations apply to both
machinery and their parts or subassemblies.
- It will require manufacturers to
comply with the safety and conformity standards set forth by the Bureau
of Indian Standards (BIS).
- The regulations cover more than an
estimated 50,000 types of machinery, including key
industrial equipment like pumps, compressors, centrifuges, cranes,
transformers, and switchgear, which fall under 463 tariff lines or product
categories.
- In
FY 2024, India’s imports in these tariff lines amounted to $25
billion, with China accounting for 39.1 percent of
that value.
- India
also exported $17.7 billion worth of machinery in the
same period.
What
are the concerns?
- Though the export-oriented
items have been exempted from the order that mandates prior
approvals from the Bureau of Indian Standards (BIS).
- However
it offers only little relief to the 1.5 lakh such
equipment manufacturers as they supply to both domestic and export
markets.
- Currently, most MSMEs adhere to ISO
9001 norms that don’t address safety concerns explicitly.
- On
the other hand the new norms are highly technical and the lack of
implementation guidelines from BIS will make compliance even
more difficult for producers.
- Financial and technical barriers will
pose significant hurdles for MSMEs, with compliance costs ranging from ₹50,000
to ₹50 lakh depending on the type of machinery and the standards
required.
Concluding
remarks
- The government should delay
implementation and help the industry prepare.
Without support, most MSMEs may struggle to comply and be forced to close.
- A phased approach, with extended
timelines for compliance and support from
industry bodies will be essential to ensure the benefits of these new
safety standards are fully realized without unduly burdening smaller
businesses.
MSMEs
MSMEs
or Micro, Small, and Medium Enterprises are businesses that are defined by
their investment and turnover levels.
They are considered an important sector of the economy as they create jobs,
generate income, and promote entrepreneurship.
Contribution
of MSMEs
- Contribution in
Economy: MSMEs are often called the backbone
of the Indian economy; they account for more than 11 crore jobs and
contribute around 27% of India’s GDP.
- Employment
Generation: The sector consists of around
6.4 crore MSMEs , with 1.5 crore of them registered on the Udyam portal
and employs around 23% of the Indian labor force, making it
the second-largest employer in India after agriculture.
Output
and Exports: They account for 38.4% of the
total manufacturing output and contribute 45.03% of the
country’s total exports.
Source: https://www.thehindu.com/business/fresh-headwinds-for-msmes-new-machine-safety-norms/article68622473.ece