[India] MSMEs bear the burden of high compliance costs

In India, new research has revealed that manufacturing MSMEs are bearing an overwhelming regulatory burden, with compliance costs ranging between Rs 13 and Rs 17 lakh annually, Nagaland Post reports.

A new study by TeamLease RegTech, Decoding Compliance for Manufacturing MSMEs in India, highlights the high volume, complexity, and cost of adhering to India’s regulatory landscape for small businesses.

News agency ANI shared the study and its findings, that a typical manufacturing MSME operating in a single state must comply with over 1,450 regulatory obligations annually across seven categories of law.

This reportedly includes managing 48 different registers, facing 59 types of inspectors, and adhering to 486 imprisonment clauses, many linked to procedural violations.

“The compliance burden is not only intricate but also expensive,” the report said. It stated that labour laws alone contribute to 66 per cent of all imprisonment-related clauses, exposing MSMEs to significant legal risks for minor missteps.

Rishi Agrawal - TeamLease RegTech CEO - reportedly emphasised the need for regulatory reform. 

According to ANI, Mr Agrawal cited the success of India’s Digital Public Infrastructure (DPI) in transforming payments.“The data reflects an urgent need for reimagining compliance for unshackling India’s MSME entrepreneurs,” he said.

“We need to add compliance to India’s DPI stack,” he added.

In addition, the report noted the dynamic nature of India’s regulatory environment, with an average of 42 legal updates per day.

In FY 2024-25 alone, there were 9,331 regulatory changes across different ministries, departments, and authorities. Around 90 per cent of these changes had a direct impact on MSMEs.

Source: Nagaland Post

(Quotes via original reporting)

In India, new research has revealed that manufacturing MSMEs are bearing an overwhelming regulatory burden, with compliance costs ranging between Rs 13 and Rs 17 lakh annually, Nagaland Post reports.

A new study by TeamLease RegTech, Decoding Compliance for Manufacturing MSMEs in India, highlights the high volume, complexity, and cost of adhering to India’s regulatory landscape for small businesses.

News agency ANI shared the study and its findings, that a typical manufacturing MSME operating in a single state must comply with over 1,450 regulatory obligations annually across seven categories of law.

This reportedly includes managing 48 different registers, facing 59 types of inspectors, and adhering to 486 imprisonment clauses, many linked to procedural violations.

“The compliance burden is not only intricate but also expensive,” the report said. It stated that labour laws alone contribute to 66 per cent of all imprisonment-related clauses, exposing MSMEs to significant legal risks for minor missteps.

Rishi Agrawal - TeamLease RegTech CEO - reportedly emphasised the need for regulatory reform. 

According to ANI, Mr Agrawal cited the success of India’s Digital Public Infrastructure (DPI) in transforming payments.“The data reflects an urgent need for reimagining compliance for unshackling India’s MSME entrepreneurs,” he said.

“We need to add compliance to India’s DPI stack,” he added.

In addition, the report noted the dynamic nature of India’s regulatory environment, with an average of 42 legal updates per day.

In FY 2024-25 alone, there were 9,331 regulatory changes across different ministries, departments, and authorities. Around 90 per cent of these changes had a direct impact on MSMEs.

Source: Nagaland Post

(Quotes via original reporting)