What is MSME ZED certification?

Ministry for Micro, Small, and Medium Enterprises has launched the MSME (Micro, Small, and Medium Enterprises) Sustainable (ZED-Zero Defect Zero Effect) Certification Scheme.

What is the Scheme?

This Scheme is a broad effort to support and ease MSMEs to adopt ZED practices and provide incentives to them for ZED Certification while encouraging them.

MSME Sustainable (ZED) Certification can be obtained on Three Levels after registering and taking the ZED Pledge:


  • Certification Level 1: BRONZE
  • Certification Level 2: SILVER
  • Certification Level 3: GOLD

After taking the ZED Pledge, the MSME can apply for any Certification Level that can ease the requirements mentioned in each level. The intent of taking a ZED Pledge is to take a “pre-commitment” or a solemn promise by MSMEs to uphold the values of Zero Defect Zero Effect in their practices and to urge them to move ahead on the journey of ZED.


Under the Scheme, MSMEs get subsidies, on ZED certification:


  • Micro Enterprises: 80%
  • Small Enterprises: 60%
  • Medium Enterprises: 50%

A provision of up to Rs. 5 lakhs (per MSME) is made available for consultancy support for MSMEs under ZED Certification for assisting them to move towards Zero Defect Zero Effect solutions. MSMEs can also take advantage of a variety of other incentives offered by states and UTs, financial institutions, and others for ZED Certification, as well as apply for free certification under the MSME KAWACH (COVID-19 Support) initiative.

Benefits of the scheme

MSMEs can minimize waste, increase productivity, improve environmental awareness, save energy, use natural resources more efficiently, extend their markets, and more by pursuing ZED Certification.

What is Zero Defect Zero Effect Scheme?

The program is an integrated and comprehensive certification system that was launched in 2016 by the Ministry of MSME. In both products and processes, the system considers productivity, quality, pollution mitigation, energy efficiency, financial position, human resource, and technological depth, including design and IPR (Intellectual Property Rights). The goal is to spread the ‘ZED’ culture in India, which is based on the principles of Zero Defect and Zero Effect.

Zero Defect:


  • The Zero-defect concept is focusing on the customer.
  • Zero non-conformance or non-compliance
  • Zero waste

The objective of the Scheme

• To create a Zero Defect Manufacturing Ecosystem in MSMEs.

• To encourage the adoption of high-quality tools and systems as well as energy-efficient manufacturing. Allow MSMEs to produce high-quality products.

• To encourage MSMEs to continually improve their product and process quality standards.

• To train professionals in the field of ZED certification and manufacture.

• To assist the “Make in India” initiative.

After the expiry of the validity of the ZED Certificate, MSMEs can go for Renewal of their ZED Certification level to continue availing of associated benefits/incentives.

Eligibility for the scheme- All MSMEs registered with the UDYAM registration portal (of the MoMSME) will be eligible to participate in MSME Sustainable (ZED) Certification and avail of related benefits/incentives.

ZED Certification Process

The following are the seven stages that an MSME must take to achieve ZED certification:


  1. Registration– First, the MSME must register online at www.zed.org.in. This straightforward step signifies an MSME’s willingness to engage in the ZED program. To begin the registration procedure, the MSME must have a functional email address and an Indian phone number. After completing the registration, the MSME will be assigned a ZED ID.
  2. Self-assessment– This is an online activity in which the MSME must enter their ZED ID and answer easy questions on the ZED criteria. This is the final phase. MSME may be required to provide necessary papers as proof of the responses selected.
  3. Desktop Assessment– Following the online self-assessment, QCI will examine and assess the MSME’s replies and documents, and issue a preliminary evaluation based on the responses and evidence presented. Desktop Assessment is the term for this. The MSME’s ability to progress will be determined by the results of the Desktop Assessment.
  4. Site Assessment– If the MSME is chosen to proceed following the desktop assessment, the QCI will assign a ZED certified assessor from an approved rating agency to undertake a physical inspection of the MSME’s manufacturing plant. The MSME will set the parameters for this site evaluation during the online self-assessment step. The site evaluation procedure usually takes four man-days.
  5. Issue of ZED Rating– Successful MSMEs receive a ZED rating and a certificate once the site evaluation is finished and the assessor submits the final report.
  6. MSMEs with a score of 2.2 or lower are not eligible for certification. MSMEs with a score of more than 2.2 will receive the certification, which will be valid for four years and will require the unit to seek renewal before the certification expires.
  7. Handholding facility– MSMEs with a Bronze rating or higher will be able to use the services of a ZED-certified consultant. This consultant will support the unit in implementing interventions targeted at enhancing the unit’s overall rating. The consultant will be assigned to the MSME by the QCI, and the handholding procedure will normally take 6 months.
  8. Re-assessment– MSMEs that have gone through the consultation procedure with a ZED certified consultant will be able to seek a re-assessment if they believe their systems and processes have significantly improved. It should be emphasized that the re-assessment subsidy will only be paid if the rating increases by one level, for example, from bronze to silver or silver to gold. If there has been a six-month gap between the last site assessment and the evaluation, an MSME can choose for reassessment without having to go through the consultation procedure.

ZED Rating Scale

The ZED rating is based on a weighted average of the scores received for each of the 50 relevant factors. MSMEs seeking a ZED rating must meet 20 essential factors and at least 10 additional parameters as defined by the MSMEs’ domain competencies, i.e. sector of operation and industrial type. The ZED rating is a maturity assessment approach that evaluates an MSME’s manufacturing unit on process-based enablers and performance-based outcome criteria at the operational level to constantly improve processes and progress from bronze to platinum level maturity.


ZED Rating Scale

ZED Rating Scale

Following the examinations and evaluations, the final rating given to the MSME will be valid for four years, pending compliance with a QCI monitoring audit. The rating parameters for MSMEs in various sectors may be found at https://www.zed.org.in/parameters, and a current list of ZED-certified MSMEs across the country can be found at https://zed.org.in/zed-certified-msmes.

MSME ZED certification benefits

ZED (Zero Defect Zero Effect) certification is a quality certification scheme for Micro, Small, and Medium Enterprises (MSMEs) in India. The certification is intended to improve the competitiveness of MSMEs and promote sustainable manufacturing practices. Some benefits of ZED certification include:

  1. Improved efficiency and productivity: ZED certification helps MSMEs identify and eliminate waste and inefficiencies in their operations, leading to increased efficiency and productivity.

  2. Increased competitiveness: ZED certification helps MSMEs meet the requirements of national and international buyers, making them more competitive in the global market.

  3. Improved brand reputation: ZED certification demonstrates to customers and other stakeholders that an MSME is committed to quality and sustainability, which can improve the reputation of the company.

  4. Access to government schemes: MSMEs with ZED certification may be eligible for financial and technical assistance from the government for implementing sustainable manufacturing practices.

  5. Cost savings: By implementing sustainable manufacturing practices, MSMEs can reduce their costs for energy, water, and other inputs, leading to cost savings.

  6. Improved compliance with regulations: ZED certification helps MSMEs comply with national and international regulations related to quality and sustainability, reducing the risk of fines and penalties.

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