• The Government has extended the MSME quality certification fee concession for another three years, continuing support for national and international quality certifications with graded fee reductions across categories.
  
• The extended timeline reduces uncertainty around compliance-related costs, allowing MSMEs to plan certification activities instead of rushing decisions around scheme deadlines.
  
• Quality certification is now closely linked to market access, influencing buyer onboarding, tender eligibility, and participation in formal supply chains.
  
• Policy continuity encourages MSMEs to move away from last-minute compliance and focus on building long-term operational capability.
  

Over the past decade in India, the number of export shipments carrying accepted quality certificates has doubled, from 61,000 to over 1,20,000. This growth reflects how quality certification is steadily becoming embedded in trade flows, buyer expectations, and market access decisions. Against this backdrop, the Government has moved to extend the MSME quality certification fee concession for another three years. The proposal, initiated by the Bureau of Indian Standards (BIS), continues the differentiated fee-reduction structure of 80% for micro-enterprises, 50% for small enterprises, and 20% for medium-sized firms. While the immediate benefit is financial, the larger implication lies in the planning visibility this extension provides to MSMEs. 

Traditionally, many MSMEs have pursued quality certification only when required for buyer onboarding, tender eligibility, or export clearance. The extended timeline creates space to move away from this reactive approach and adopt quality standards in a more structured, business-aligned manner.

Why Quality Failures Are Becoming Costly for MSMEs

Quality gaps translate directly into financial losses and missed market opportunities. India continues to face export losses due to consignment rejections, particularly in agriculture, marine products, and processed food categories, where importing countries apply strict inspection and certification norms. For instance, Indian exporters lost $500,000 in 2025 after US rejected 15 shipments of mangoes due to quality certification lapse. These rejections not only lead to the loss of shipment value but also increase logistics costs, delay payments, and strain buyer relationships.

Official bodies such as the Export Inspection Council and policy assessments from NITI Aayog have repeatedly pointed out that inconsistent compliance with quality certifications weakens India’s export competitiveness. For MSMEs, which operate on thinner margins and limited buffers, the financial impact of such rejections can be disproportionate.

In this context, quality certification functions as a risk-mitigation tool that reduces the likelihood of shipment rejection, audit failure, and downstream financial losses.

Moving from Compliance-Driven to Planned Certification

Short-term support schemes often push MSMEs into rushed decisions. Many delay certification until deadlines approach, while others hurry through audits simply to claim benefits. Both approaches increase the risk of audit failures, repeat expenses, and disruption to daily operations.

The three-year extension allows certification to be integrated into regular business planning. Audits can be scheduled around production cycles, and documentation and processes can be strengthened gradually. This reduces internal disruption and improves audit outcomes. Over time, this planned approach helps MSMEs view quality not as an external imposition, but as a normal part of running the business.

6 Ways MSMEs Can Use the 3-Year Quality Certification Fee Concession Strategically

The three-year extension of the quality certification fee concession gives MSMEs the opportunity to rethink how they approach certification. Instead of treating it as a one-time compliance requirement, businesses can now use the extended timeline to align quality investments with commercial priorities, operational readiness, and cash flow planning.

1. Prioritise Certifications That Affect Orders and Eligibility
   MSMEs should begin by identifying certifications that directly influence orders, tenders, or buyer onboarding. Certifications linked to specific customers or regulated markets usually deliver immediate commercial value and should be addressed first.
   
2. Focus on Standards With Clear Business Impact
   Standards that improve market access or revenue visibility should take priority over generic certifications. A targeted approach ensures certification spends translate into measurable business outcomes.
   
3. Use the Three-Year Window to Plan, Not Delay
   The extended timeline allows MSMEs to plan quality upgrades in advance instead of postponing them. Delayed certification often leads to rushed spending when buyer requirements arise suddenly, increasing costs and reducing effectiveness.
   
4. Phase Certification Investments Over Multiple Years
   MSMEs can start with certifications for core products or key processes and expand coverage over time. This phased approach reduces financial strain and allows quality systems to mature steadily.
   
5. Align Certification Timelines With Market Access Cycles
   Large buyers and public procurement platforms increasingly prefer or require certified suppliers. Aligning certification with vendor onboarding and tender cycles improves acceptance and reduces operational friction.
   
6. Use Certification to Strengthen Internal Systems
   Preparing for audits requires documented SOPs, process consistency, traceability, and proper record-keeping. These improvements enhance efficiency, accountability, and operational control beyond certification itself.
   

Managing Cash Flows While Investing in Quality

One of the most common concerns around quality certification is its impact on cash flows. Certification fees are incurred upfront, while benefits such as higher order volumes or better pricing are collected over time. The extended reimbursement framework allows MSMEs to spread certification expenses over multiple financial years. This reduces pressure on working capital and makes it easier to align quality investments with production cycles. Greater visibility on reimbursement also supports more informed financing decisions. Certification costs can be factored into broader capex or working capital planning rather than treated as unplanned expenses.

1.Journal of Emerging Technologies and Innovative Research (JETIR), October 2025
2.Maharashtra State Agricultural Marketing Board (MSAMB)