New safety regulations for machinery, equipment to affect MSMEs: GTRI

The new safety regulations for machinery and electrical equipment issued by the government will affect domestic production by the MSME segment and delay the import of essential equipment, think tank GTRI said on Monday.

It suggested extending the compliance timeline, implementation in a phased manner, and extending government support to help the industry deal with the regulations.

It said that while large corporations may have the resources to meet new safety standards, MSMEs face unique challenges in complying with the Ministry of Heavy Industry's (MHI) order.

These challenges include financial, technical, and infrastructural constraints, making compliance a significant burden for small businesses, the Global Trade Research Initiative (GTRI) said.

On August 28, 2024, the Ministry introduced the Machinery and Electrical Equipment Safety (Omnibus Technical Regulation) Order, 2024, which is set to take effect on August 28, 2025.

These comprehensive 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, it said.

It added that the new rules are expected to have far-reaching consequences for manufacturers, particularly Micro, Small, and Medium Enterprises (MSMEs), which make up 90 per cent of the estimated 1,50,000 manufacturers that will be affected.

It also said that the regulations cover more than an estimated 50,000 types of machinery, including key industrial equipment like pumps, compressors, centrifuges, cranes, looms, metal-cutting tools, 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 per cent of that value. India also exported $17.7 billion worth of machinery in the same period.

These regulations apply to both machinery and their parts or subassemblies and will require manufacturers to comply with the safety and conformity standards set forth by the Bureau of Indian Standards (BIS).

"Although the ministry order does not apply to export-oriented machinery, this exemption may not be helpful in practice, as most firms manufacture goods for both domestic and export markets. Therefore, businesses will still need to meet full BIS certification requirements for their entire product range," GTRI Founder Ajay Srivastava said.

He said that to ensure the successful implementation of the new safety regulations, a coordinated strategy involving the government, industry associations, and firms is necessary.

Anil Jauhri, ex-CEO, the National Accreditation Board for Certification Bodies (NABCB), said that a mechanism for certifying competent technical professionals is essential to help industries implement these new standards.

"While the Indian National Strategy for Standardisation (INSS) emphasises counselling and training, no action has been taken to certify technical consultants and trainers. This has left industries struggling with implementation," Johri said.