Technology and Quality Upgradation Support to MSMEs

Technology upgradation support to MSMEs

Quality and Technology Upgradation have emerged as the two important elements for enhancing competitiveness of any manufacturing industry. The large industries have both adequate information about the global markets and access to funds, which enable them to implement strategies for continuous technology and quality upgradation. On the other hand, MSMEs, with limited information and access to funds, typically think short term. They tend to minimize capital investment with the objective of keeping the cost low. This approach has brought many Indian MSME suppliers to the lower end of the global value chain and ultimately made them uncompetitive as the suppliers of stand-alone products. The present scheme aims to address the quality and technology aspects of manufacturing in MSMEs.


  • The present Scheme is to sensitize the manufacturing MSME sector in India to the use of energy efficient technologies and manufacturing processes so as to reduce cost of production and the emissions of GHGs.
  • This Scheme also focuses on additional spin-offs for the MSME sector through clean development mechanism (CDM).
  • A very unique concept of cluster based carbon credit aggregation centres (CCAs) has been planned to initiate MSMEs to CDM benefits.
  • The Scheme also emphasizes towards improving the product quality of MSMEs and to encourage them for becoming globally competitive. Certification of products to national and international standards is an important tool to enhance the product value of Indian MSMEs.

Major Activities

There are few activities under which the objectives will be achieved. Below are the major activities

  • Capacity Building of MSME Clusters for Energy Efficiency/Clean Development Interventions and other technologies mandated as per the global standards: Office of the the Development Commissioner (MSME) will identify MSME clusters for conducting the awareness programmes on Energy Efficiency Technologies (EET), Clean Development Mechanism (CDM), etc., on the basis of the responses received from the MSME-DIs, cluster based associations, NGOs and technical institutions. The awareness programme will normally be of one day duration with the participation of at least 30 MSMEs.
  • Implementation of Energy Efficient Technologies (EET) in MSME units: Objective of this Activity is to encourage MSMEs in adopting energy efficient technologies. For this purpose, bankable DPRs for the implementation of energy efficient technologies will be invited from the MSMEs. To facilitate the initiative, MSMEs in the identified clusters will be supported in preparation of bankable DPRs under the major activity No.1 listed above. This Activity will be implemented through SIDBI who will function as the Implementing Agency. After finalization of the DPR, the concerned MSME units can approach SIDBI directly or through their Bankers for seeking loan/subsidy for implementation of the Projects. Both technical and bankability appraisal by SIDBI/Bank will be taken into consideration prior to the sanction of the assistance in the form of grants.
  • Setting up of Carbon Credit Aggregation Centres (CCA) for introducing and popularising clean development mechanism(CDM) in MSME clusters: The Activity will focus on market transformation of the results of energy efficiencies. The concept of Clean Development Mechanism (CDM) through reduction and management of carbon footprints have been introduced under Kyoto Protocol for reduction of emission of Green House Gases like carbon dioxide, which is a common emission from industries using coal and petroleum products. The potential Clusters having adequate number of EET/Renewable Energy (RE) based projects will be identified for setting up of the CCA centres. The CCA centres will be set up as special purpose vehicles (SPVs) with participation from cluster based associations, technical institutions, NGOs, etc. The participation of State Governments in the SPVs is also permitted. The initial handholding/implementation of the CCA centres will be carried out by an expert Agency and they will be transferred to the SPVs in due course.
  • Encouraging MSMEs to acquire product certification/licences from National/International bodies and adopt other technologies mandated as per the global standards: The focus here is to provide subsidy to MSME units towards the expenditure incurred by them for obtaining product certification licenses from National Standardization Bodies (like BIS, BEE, etc.) or International Product Certifications (CE, UL, ANSI, etc.). The purpose of the ‘Standard Marking’ of the products is to assure product quality to the users/consumers. Certification of MSMEs products to International Standards, CE, ANSI, UL, Energy Star, etc. would also enhance acceptability of the products in the export market. This activity comprises of two initiatives such as:
    1. To conduct Awareness programme in identified MSME clusters on product quality certification, energy star rating, procedure for certification to International Standards, etc. Total 60 Nos. of programmes will be conducted on the awareness generation on product certification through implementing agencies like BIS, Indian Institute of Quality Management, Jaipur or any other expert body in the relevant field.
    2. Provide financial assistance to MSMEs in obtaining product certification to National and International standards. The Activity will be implemented through MSME-DIs functioning under the Office of the DC (MSME). Total 3,000 product certification on National Standards and 1,000 on International Standards are proposed to be reimbursed under the scheme.
    More information about this scheme is available on

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