What is ZED(Zero Defect Zero Effect)?
ZED stands for Zero Defect Zero Effect, which is an initiative by the Indian government aimed at promoting quality manufacturing practices and environmental sustainability. It encourages businesses, especially small and medium enterprises (SMEs), to adopt practices that improve product quality while minimizing environmental impact.
The core principles of ZED are:
Zero Defect: Ensuring that products meet high-quality standards with no defects.
Zero Effect: Ensuring that the production process does not harm the environment.
What is MSME sustainable Zed Certification Scheme?
MSME Sustainable (ZED) Certification is an extensive drive to create awareness amongst MSMEs about Zero Defect Zero Effect (ZED) practices and motivate and incentivize them for ZED Certification.
Through the journey of ZED Certification, MSMEs can reduce wastages substantially, increase productivity, enhance environmental consciousness, save energy, optimally use natural resources, expand their markets, etc.
MSMEs will also be motivated to adopt best practices in work culture, standardization of products, processes and systems etc. in order to enhance their global competitiveness and sustainability.
The ZED Certification aims at enhancing the competitiveness of an MSME by assessment, modification through guidance, handholding, managerial and technological intervention – not just certification.
Importance/Objectives of ZED
The Zero Defect Zero Effect (ZED) initiative enhances MSME competitiveness by ensuring high-quality production (Zero Defect) and minimal environmental impact (Zero Effect).
- Better Quality & Global Reach – Reduces defects, boosts customer satisfaction, and meets
international standards for easier exports.
- Sustainability & Efficiency – Promotes eco-friendly practices, energy efficiency, and resource
- Market Competitiveness – Enhances global standing, builds stakeholder trust, and unlocks government incentives.
- Cost & Productivity Gains – Reduces waste, lowers costs, and encourages lean manufacturing.
- Government Support – Offers subsidies, easier loans, and aligns with Make in India
- Job Creation & Skill Development – Provides training, improves workforce efficiency, and boosts employment.
The goal is to encourage MSMEs to improve their processes, produce high-quality products, and reduce environmental impact.
There are three main types (or levels) of ZED Certification:
- Bronze Level (Awareness Level)
- Purpose: To create awareness about quality and sustainability practices.
- Who it’s for: MSMEs that are new to quality management and want to begin the journey.
- Parameters: Seven (7)
- Fees: Free of cost
- Focus Areas:
- Basic quality systems
- Housekeeping (5S)
- Safety and hygiene practices
- Basic compliance
- Silver Level (Intermediate Level)
- Purpose: To recognize MSMEs those have implemented structured quality and environmental systems.
- Who it’s for: Enterprises that have begun formalizing their internal systems.
- Parameters: Fourteen (14)
- Focus Areas:
- Process control
- Energy and resource efficiency
- Waste management
- Risk management
- Training and skill development
- Gold Level (Maturity Level)
- Purpose: To certify MSMEs that follow globally competitive standards in quality and environmental performance.
- Who it’s for: Enterprises with advanced systems and sustained excellence in operations.
- Parameters: Twenty (20)
- Focus Areas:
- Continuous improvement culture
- Total quality management (TQM)
- Supply chain management
- Advanced compliance with national and international standards
Benefits & Incentives of Zed
- Free (100% subsidy) ZED Certification for Women Owned MSMEs.
- Financial assistance in testing/system/product certification up to Rs 50,000.00
- International Cooperation (IC) Scheme.
- Waiving / Reduction in Bank interest Loan & or processing fee.
- An MSME unit will get subsidy as per the following structure, on the cost of certification:
- Micro Enterprises: 80%
i. Small Enterprises: 60%
ii. Medium Enterprises: 50% - Freight charges under International Cooperation (IC) Scheme.
- Joining Reward of Rs. 10,000/- after signing ZED pledge.
- Additional Subsidy of 10% for the MSMEs owned by Women/SC/ ST Entrepreneurs OR MSMEs in NER/ Himalayan/LWE/Island territories/Aspirational districts
- Additional Subsidy of 5% on ZED Certification Cost for MSMEs which are also a part of the SFURTI OR Micro & Small Enterprises – Cluster Development Programme (MSE-CDP) of the Ministry of MSME.
- Credit Guarantee Scheme.
FAQs
1. Who can apply for ZED certification?
Ans. Any Micro, Small, or Medium Enterprise (MSME) registered in India.
2. What are the benefits of ZED certification?
Ans. Improved product quality, cost savings, environmental compliance, government incentives, and better market access.
3. How long is the ZED certification valid?
Ans. Typically valid for 3 years, but requires periodic assessments for renewal.
4. What are the costs associated with ZED certification?
Ans. The government provides subsidized assessment fees for MSMEs; costs vary based on certification level.
5. How can an MSME apply for ZED?
Ans. Register on the ZED portal, complete self-assessment, undergo third-party evaluation, and implement suggested improvements.
6. What kind of government support is available?
Ans. Financial assistance, training programs, and loan subsidies for certified MSMEs.
7. Does ZED apply only to manufacturing industries?
Ans. Primarily for manufacturing MSMEs, but in future service-based industries can also adopt quality and sustainability practices.
NOTE: For official website, you can visit at: https://zed.msme.gov.in/