Empowering India’s Manufacturing Sector: The Role of ZED and MSMEs in Advancing Quality and Sustainability

Abstract

India’s Micro, Small, and Medium Enterprises (MSMEs) are pivotal to the nation’s manufacturing sector, contributing over 30% to GDP, employing 110 million people, and driving exports. However, challenges in product quality, environmental sustainability, and global competitiveness hinder their growth. The Zero Defect Zero Effect (ZED) certification scheme, launched by the Government of India in 2016, addresses these issues by promoting high-quality, defect-free manufacturing and environmentally sustainable practices. This paper provides an exhaustive review of the ZED framework, analysing its principles, impact on MSMEs, implementation challenges, and government support mechanisms. Findings show that ZED adoption enhances product quality, reduces operational costs, improves regulatory compliance, and facilitates market access. However, barriers such as low awareness, financial constraints, technical skill gaps, and resistance to change limit its adoption. Government initiatives, including financial subsidies, training programs, and technology upgradation schemes, play a critical role in supporting MSMEs. Despite these efforts, broader awareness, simplified certification processes, and sustained policy interventions are needed to maximize ZED’s impact. This review advocates for a multi-stakeholder approach involving government, industry, and academia to position MSMEs as global leaders in sustainable manufacturing.