What is FMCS — the Foreign Manufacturers Certification Scheme?

What is FMCS?

The Foreign Manufacturers Certification Scheme (FMCS) is administered by the Bureau of Indian Standards under the BIS Act, 2016 and the BIS (Conformity Assessment) Regulations, 2018. It applies to all foreign manufacturers whose products fall within mandatory product categories established by Quality Control Orders except electronics and IT products which are governed separately by the Compulsory Registration Scheme (CRS).

FMCS covers a broad range of mandatory categories including steel products, chemicals, electrical equipment, industrial machinery and consumer goods. Where a QCO mandates the ISI mark for a product, a foreign manufacturer must hold a valid FMCS licence before that product can be imported in India. An importer cannot substitute for the manufacturer in this process and no agent, distributor or Indian entity can apply on the manufacturer’s behalf.

This scheme currently has more than 1,650 active licence holders across manufacturing bases in Europe, North America, Japan, South Korea and Southeast Asia. The number continues to grow as India extends QCO coverage to additional product categories.

How FMCS works

Before filing, the foreign manufacturer must nominate an Authorised Indian Representative (AIR), an individual resident in India who accepts legal responsibility for all BIS dealings on behalf of the manufacturer. BIS will not process an application without a validly nominated AIR.

The application is submitted directly by the manufacturer for one specific product against one specific IS code at one named manufacturing facility. BIS then ensures the visit of an inspection team to the overseas factory to assess the facility, production equipment and quality management systems. During the inspection, BIS seals product samples and sends them to a BIS-recognised laboratory in India for testing against the applicable IS code.

If both the factory inspection and laboratory testing confirm conformance, BIS may grant the licence. The manufacturer is required to submit a Performance Bank Guarantee which is typically USD 10,000, subject to the applicable BIS schedule at the time of application. The initial licence is valid for one year and is renewable. Ongoing periodic factory re-inspections and market surveillance form part of the licence conditions throughout its term.

Note: FMCS timelines in practice typically run six to nine months from application to licence and sometimes longer depending on inspection scheduling and product category. A supply commitment made before a licence is in hand may lead to delays as the licensing process is outside the manufacturer’s control.

Implications for businesses

For foreign manufacturers, the FMCS licence is the sole legal basis on which notified products may enter the Indian market. In mandatory categories, goods shipped from unlicensed manufacturers are detained, seized and penalized.

For Indian manufacturers, FMCS license requirement on foreign manufacturers creates market parity by excluding uncertified imports and allowing certified domestic goods. The competitive landscape narrows to certified participants on all sides.

For importers, the structural exposure is identical to that under any BIS scheme wherein, the licence belongs to the foreign manufacturer and not the importer. An importer’s customs clearance depends entirely on the active status of the supplier’s FMCS licence at the moment the container arrives. A lapse, suspension or cancellation of which the importer may have no advance notice may result in immediate detention.

Legality and risks

Customs verification of FMCS licences at Indian ports is conducted against the BIS portal in real time at the time of filling of Bill of Entry filing. A licence that has lapsed, suspended or does not correspond to the declared product and factory may result in immediate consignment detention. Demurrage on the container and ground rent on the goods begin accruing from day one. The limited available remedies include a move to re-export, seek conditional exemption or confiscation, each of which may not be available and generally would be costlier than pre-shipment verification.

The FMCS licence is specific to the product specification and the named factory. A raw material change, a substituted component or a production shift to a different facility, without formal notification to BIS and a corresponding licence amendment, may render resulting shipments non-compliant even where the licence remains nominally valid. Periodic sampling by BIS market surveillance identifies when products deviate from their specifications.

Importers who verify only that a licence exists, without confirming that it covers the current product specification and the facility from which goods are being sourced, carry unresolved exposure on every shipment.

Note: Pre-order verification on the BIS portal returns licence status, IS code and the named facility may help to eliminate the majority of avoidable port detentions. (www.manakonline.in)

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