Warning! New BIS registration requirement for European producers and importers of nuts and bolts in India

In July 2023, India's Ministry of Trade and Industry introduced mandatory BIS registration for all companies involved in the production, distribution, and import of bolts, nuts, and other fasteners in India. If you do not register and try to import these products, this can have far-reaching consequences. We will explain how to arrange the registration as quickly as possible. 

Bureau of Indian Standards (BIS)

The 'BIS' in BIS certification stands for the Bureau of Indian Standards. It is the national certification body of India. The bureau was established in 1986 with the aim of setting up standardisation of quality norms for various products, such as building materials, food products, consumer electronics and raw materials. 

The list of products that need to be inspected by the BIS is constantly expanding. As soon as a product is added to the list, the producer needs a mandatory certificate issued by the BIS. Domestic and foreign companies are given a period of six months to apply for their certificate. 

This is a very tight deadline and we therefore advise foreign companies to start this procedure as soon as possible. In order to give you a better insight into what is involved in a BIS registration as a foreign producer, we have prepared a comprehensive overview for you here.  

Read here: This is what European companies need to know about BIS registration

How Foreign Companies Must Register with BIS

If this change requires your company to register with BIS, you will need to apply for your certification through the Foreign Manufacturers' Certification Scheme (FMCS).

To obtain the BIS registration, you must first register with the BIS and pay the application fee for the registration. Be aware that a separate application is required for each product. All the steps you need to go through for registration can be found here:

The documentation process for a BIS certification can take about 9 to 10 months on average and places a heavy burden of proof on you as a company to demonstrate that your product meets all local requirements. Registration with the BIS can be done by two entities:

• Your Indian liaison or branch office (as long as it has all the rights of the Reserve Bank of India to file an application) 

• A legally appointed agent in India

It is highly recommended to opt for the second option. The process starts with a lot of paperwork in which you have to demonstrate how the quality of the product is guaranteed. It is also necessary to explain on paper exactly how the production processes work, from the purchase of the raw materials to the ways in which the final product is tested.

Only a local expert with specific experience in applying for BIS certification for international companies understands how everything should be documented and submitted. If you hand this assignment to your local entity and they start working on it with no experience, you are bound to incur a delay of several months.

A local agent who takes care of everything for you

Navigating the intricacies of BIS certification and import procedures can be a challenging one for foreign companies. Let this difficult task be taken off your hands and you won't be delayed by choosing an experienced, local expert. At IndiaConnected, we always have the right agent for you, who has experience in your specific sector and is an expert in the field of compliance with the new regulations and handling the certification process.

MOOWR scheme: tax breaks for European companies looking to produce in India

The Manufacturing or Other Operations in Warehouse Regulations (MOOWR) is a comprehensive set of guidelines published by the Indian government to encourage foreign investment in the country. These regulations offer several benefits to international companies looking to establish manufacturing or assembly units in India. In this article, we list the main benefits of the MOOWR program for European companies.

Easier access to the Indian market

The MOOWR scheme can be an attractive option for international companies looking to enter the Indian market. It gives international companies the option of setting up manufacturing facilities in India in a straightforward manner, reducing their reliance on importing products or semi-finished goods and taking immediate advantage of the many favorable tax schemes available to international companies manufacturing in the country.

Deferral of payment of import duties

Under the MOOWR scheme, international companies can import raw materials, semi-finished and (capital) goods without paying import duties in advance. Import duties need not be paid until the finished goods are exported or sold domestically. The deferred payment of import duties can significantly reduce the initial capital costs for international companies, allowing them to invest more in their production activities during this initial phase.

Streamlined customs procedures

The MOOWR program simplifies customs procedures for importing goods into India for manufacturing or assembly purposes. Fewer documentation requirements apply, fewer physical inspections are required, and products have a faster clearance time. The simplified rules also allow international companies to reduce their administrative burden and operational costs.

Produce quickly and easily

Under the MOOWR scheme, international companies can carry out a wide range of manufacturing and other activities within bonded warehouses, including assembly, processing, packaging and testing. This means that there is no need to set up their own factory immediately, as the scheme allows international companies to lease or rent production sites within existing bonded warehouses or to set up their own bonded warehouse within the existing premises. This flexibility provides European companies with more control over their production processes because they do not necessarily have to outsource to a third party.

Exporting without barriers

MOOWR, unlike other schemes, does not impose specific export obligations when imports are made by the European company to India. This gives international companies more flexibility in their export plans and the ability to target markets where they see the greatest potential for growth and profitability. India's strategic location provides European companies with access not only to Asia, but also to Oceania. By establishing themselves in India through the MOOWR scheme, European companies can expand their reach and tap into new markets.

Find out here how you too can export capital goods to India advantageously under the MOOWR scheme to make your production processes more efficient.

Working together to grow faster in the Indian market

The MOOWR program promotes cooperation between European and Indian companies and creates opportunities for joint ventures, partnerships and knowledge sharing. European companies can benefit from the expertise, market knowledge and local networks of Indian companies, facilitating market entry and long-term expansion. Working together, European companies can gain a better understanding of Indian consumer preferences, cultural nuances and business practices so they can tailor their products and services accordingly.

India is one of the fastest growing economies in the world, and the MOOWR program provides a relatively easy way for European companies to take their first steps into the dynamic Indian market. The MOOWR scheme is attractive to all European companies wishing to set up manufacturing operations in India. Are you curious about the specific benefits for your sector or company?

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Shashank Verma

Vice President of Supply Chain Management

This article was written in collaboration with vice president of Supply Chain Management, Shashank Verma.

Verma has over 22 years of experience in establishing business strategies, managing the supply chain of hundreds of European companies, establishing sound logistics in India and other related functions with a focus on revenue growth and profit maximization of organizations.

Setting up your own factory in India: here's how to avoid the most common pitfalls

If you want to start manufacturing in your own factory in India, you cannot simply copy-paste your European set-up. During the process, you need to take into account possible adjustments to your original plan so that your factory complies with Indian regulations and fits well with local practices. We will guide you through each step of the process and share pitfalls that many European companies fall into in India.

Finding the suitable location

As with finding a suitable producer, location choice when setting up a production facility is also very important. We often see European companies choosing a particular location because other companies within the industry or competitors have previously chosen that location.

No thorough location analysis is done in such a case to examine whether the necessary infrastructure is in place, whether the state or cluster has the right raw materials and semi-finished products, and whether enough and suitable personnel can be found. Choosing the wrong location can lead to irreversible problems in the long run, resulting in a departure from India.

This mistake can be easily avoided by engaging local experts who will conduct a location analysis across the country based on your needs and desires. It is important during this process to put aside any preferences and prejudices you may have and evaluate as objectively as possible the selected locations from the analysis.

After establishing a top three locations that meet your requirements, you can let your preferences factor into choosing the actual location and work with your local partner or consultant to find a suitable piece of land or existing facility that you would like to take over.

Brownfield investment

If there is a desire to establish one's own production site, but not to incur the high start-up costs associated with a greenfield investment (building one's own facility), then an existing facility can be sought to lease or purchase.

Such a brownfield investment is often done through an acquisition (M&A) of a local business. If this is chosen, the aforementioned location analysis can be expanded to include a partner search and due diligence once a potential partner is found.

There are interesting advantages to a brownfield investment:

• costs are lower on average due to the use of existing facilities, infrastructure and personnel already employed,

• it allows it to take over existing approvals and permits, saving a lot of work and time.

But there are also things that can work against it and should always be checked carefully before signing any potential agreement:

• In India, production facilities often look "simpler" than in Europe, which does not mean that they produce lower quality as a result. If an acquisition is chosen, however, it must be carefully checked that the location meets European standards.

• It is also important that the site has the proper permits to allow the facility to scale up or expand; you obviously want to avoid the possibility that you would not be able to adapt the facility to new production needs over time.

Therefore, if you choose to make a brownfield investment, it is important that you seek proper advice from a local expert with knowledge of your industry and Indian laws and regulations.

Purchasing land for a factory in India

If a greenfield investment is chosen, the establishment of its own production site, a suitable piece of land can be sought based on the result of the site analysis.

This was always a considerable challenge in India, but the Indian government is working hard to make industrial zoned land available making the search less time consuming these days. Still, it is very wise not to have a hard deadline for finding a suitable plot as it generally takes more time than expected.

In addition, the price of lots in clusters and other popular destinations can be high, making European companies decide to specifically look for cheap land. Watch out for this; there can be very nasty snags in this.

Often in these types of deals, it is said that the land has an industrial destination, but this is not the case. If a lot is purchased that later turns out to be agricultural or private zoning, it is almost impossible to get it changed and another option will have to be sought.

We therefore recommend that you look specifically for industrial lots offered by the government. Finding suitable options listens closely in India and help from a local expert in this field is therefore not a luxury.

Prepare well for setting up your production in India

Many of our clients, before making the decision to set up production in India, want to have a good understanding of what is involved in setting up a production site in India. IndiaConnected has therefore compiled all the tips and advice in a special guide on setting up your own production site in India or finding the right Indian manufacturing partner.