Meta description: Factory compliance requirements in India for 2026: sequence site approval, pollution consent, factory licensing, fire checks and sector permits before production.

Missing factory compliance requirements before production can cost far more than a delayed launch. A general contravention under Section 94 of the Occupational Safety, Health and Working Conditions Code, 2020 can attract a penalty of ₹2 lakh to ₹3 lakh, while a Pollution Control Board can order closure or stop electricity and water under Section 33A of the Water Act. These risks can strand a fitted-out plant before its first commercial dispatch.

The difficult part is that factory compliance requirements do not arrive from one department. A manufacturer may need central-law compliance, state factory approvals, Pollution Control Board consents, municipal or industrial-area permissions, fire clearance and product-specific licences. The right approach is to sequence these approvals before money is locked into land, machinery and a launch date.

This guide gives an Indian factory owner a practical pre-production sequence based on the law in force in August 2026. Your state, product, process, worker strength and pollution category decide the final list.

Which Factory Compliance Requirements Apply Before Production?

First, stop using an old Factories Act checklist as the legal map. The Occupational Safety, Health and Working Conditions Code, 2020, called the OSH Code, came into force on 21 November 2025. Section 143 repealed the Factories Act, 1948, while saving earlier rules, approvals and actions to the extent they remain consistent with the Code.

Under Section 2(w), the central definition of a factory generally covers premises where a manufacturing process is carried on:

There is a crucial state exception. If a state law used a higher or lower threshold immediately before the OSH Code commenced, that state threshold continues until the state legislature changes it. A powered unit with 12 workers cannot safely assume it falls outside factory regulation merely because the central number is 20.

Chapter II registration has a separate trigger. The definition of “establishment” treats a factory with 10 or more workers as covered for registration even if it has not crossed the 20-or-40 factory threshold. Section 81 also lets the appropriate government apply factory provisions to premises carrying on manufacturing regardless of worker count.

Before filing, record:

  1. the legal entity and exact site address;
  2. manufacturing process and products, including by-products and waste;
  3. use of power and maximum worker count, including contract labour;
  4. installed capacity, water use, fuel, emissions and effluent;
  5. hazardous chemicals or processes;
  6. state, municipality, industrial development authority and sector regulator; and
  7. licences required before construction, installation, trial production and sale.

Gate 1: Approve the Site Before Civil Work Starts

The cheapest time to discover that a process is not allowed on a plot is before signing a long lease. Verify the land-use certificate, zoning, building permission and industrial-area conditions with the relevant state development authority, municipality, panchayat or industrial corporation. A plot described as “industrial” may still restrict chemical storage, food processing, hazardous operations or groundwater extraction.

Section 79(1) of the OSH Code allows the appropriate government to prescribe submission of plans, prior permission for the factory site, construction or extension, and factory licensing. For an ordinary factory, Section 2 makes the concerned State Government the appropriate government. That is why the form, drawings, fees and approving authority differ by state.

Submit the factory plan before construction where state rules require it. The pack commonly needs the site layout, building sections, machine layout, process flow, ventilation, exits, welfare facilities and hazardous-material details. Do not move machines after approval without checking whether the revised layout counts as an extension or affects safe clear space or environmental conditions under Section 79.

If the plant involves a hazardous process, Section 83 provides for a Site Appraisal Committee for initial location or expansion. Its recommendation is due within 90 days of receiving the application, but that is not permission to begin work while the appraisal is pending.

Some projects also need prior environmental clearance under the Environment Impact Assessment Notification, 2006. The trigger is the project or activity and capacity listed in its Schedule, not simply whether the company is an MSME. Check the current notification and amendments on the PARIVESH portal before site work; environmental clearance and Pollution Control Board consent are separate approvals.

Gate 2: Get Pollution Consent Before Installing and Operating

For units that are not exempt, obtain Consent to Establish before construction or installation and Consent to Operate before running the plant. State boards may use names such as CTE, CTO, consent to establish, consent to operate or consolidated consent and authorisation.

Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 restricts establishing an industry, operation, process, treatment system, outlet or discharge without the State Board's previous consent. Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 requires previous State Board consent to establish or operate an industrial plant in an air pollution control area.

Central notifications issued in 2024 and amended later exempt specified industrial plants from consent provisions, subject to conditions. The consent guidelines were also amended in January 2026. Confirm the current category and exemption on the State Pollution Control Board portal; an old red-orange-green-white list is not reliable evidence.

Prepare a consent pack with:

The consequence is concrete. Section 33A of the Water Act allows the Board to direct closure, prohibit or regulate an industry, or stop electricity or water. After the 2024 amendment, failure to comply with Section 25 or 26 can also be prosecuted under Section 45E, with imprisonment from one year and six months to six years plus a fine. Never treat a trial run as automatically exempt; check the wording of the consent and licence before energising the line.

Gate 3: Complete Factory Registration, Licence and Notice

Site approval, establishment registration, a factory licence and a commencement notice perform different jobs.

Section 3 of the OSH Code requires covered establishments to apply electronically for registration within the prescribed period. Section 5 says a factory cannot be used to commence manufacturing without sending the prescribed notice to the prescribed authority within the state-set time. Section 79 governs site, construction and licensing permissions.

Under Section 79(2), a complete electronic application for site, construction or extension permission can be deemed granted if no order is communicated within the prescribed period, which cannot exceed 30 days. This does not create pollution consent, fire clearance, environmental clearance or a product licence, and the application must satisfy state rules.

Before occupation or trial production, keep these approvals in one launch folder:

Section 99 sets a penalty of ₹1 lakh to ₹2 lakh for omitting a required plan, notice, register, record or report without reasonable excuse. A portal screenshot showing “submitted” is not the same as a granted approval unless the law expressly provides deemed approval and its conditions are met.

Gate 4: Close Fire, Electrical and Equipment Risks

India has no single fire-NOC rule for every factory. The requirement comes from state fire-service law, local building rules and the building's occupancy, height, area, storage and hazard profile. Ask the local fire authority in writing which approval and renewal apply.

Design this before construction, not after it. Confirm fire-tender access, exits, travel distance, compartmentation, hydrants, sprinklers, alarms, water storage, emergency lighting and hazardous-material separation. Keep commissioning certificates and drill records ready for inspection.

Electrical installations, lifts, boilers, pressure vessels, petroleum storage, compressed gas and diesel tanks can bring separate approvals from state electrical inspectorates, boiler authorities, the Petroleum and Explosives Safety Organisation or other competent authorities. The exact trigger depends on equipment and capacity. Add each item to the machinery schedule and obtain a written applicability decision before purchase.

Gate 5: Clear Product-Specific Licences Before Sale

A factory licence says the workplace may operate; it does not say the product may legally be manufactured or sold.

For food, Section 31 of the Food Safety and Standards Act, 2006 says no person may commence or carry on a food business except under a licence. Petty food manufacturers covered by Section 31(2) still need registration. Use the current FSSAI licensing regulations, product category and installed capacity to decide central licence, state licence or registration.

For products covered by a Quality Control Order, Section 16 of the Bureau of Indian Standards Act, 2016 supports mandatory conformity. The BIS compulsory-certification list changes as QCOs change. Check the product, Indian Standard, enforcement date and exemption; covered goods generally cannot be manufactured or sold without the required Standard Mark and valid licence or certificate.

Other conditional regimes include drug manufacturing licences, Legal Metrology registration and declarations for pre-packaged goods, Legal Metrology model approval for specified instruments, fertiliser or pesticide licences, and extended producer responsibility for covered plastic, e-waste, battery, tyre or waste-oil activities. Match the actual product and packaging, not the marketing category.

Gate 6: Make Labour and Safety Controls Live Before Hiring

Do not wait for the first inspection to create safety records. Section 6 of the OSH Code requires the employer to provide a workplace free from hazards likely to cause injury or occupational disease, comply with safety standards, provide prescribed health examinations without charging employees, issue appointment letters and ensure employees do not pay for required safety measures.

Before the first shift:

The Code on Social Security, 2020 has been in force since 21 November 2025. Its First Schedule generally applies provident fund at 20 or more employees and employees' state insurance at 10 or more persons, subject to notifications and special provisions. Under Section 1(8), coverage continues after it first attaches even if headcount later falls below the threshold.

Use This 90-Day Factory Launch Sequence

Work backward from the intended trial-production date. A realistic control calendar looks like this:

Timing | Decision or evidence required | Stop condition

Before land or lease | Land use, zoning, process permissibility, utilities, EC screening | Site or process not permitted

Before civil work | Factory plan/site permission, CTE, fire-plan review, hazardous site appraisal if applicable | Required prior approval missing

Before machinery installation | Approved layout, equipment-specific approvals, waste and emission controls | Installation conflicts with approval

30-60 days before trial | Registration, factory licence filing, CTO readiness, product-licence testing | Inspection or evidence incomplete

Before first employee shift | Appointment letters, induction, PPE, emergency plan, contractor controls | Safety-critical action open

Before trial production | CTO and licence conditions checked; commencement notice acknowledged | Any approval excludes trial operation

Before commercial dispatch | FSSAI, BIS/QCO, Legal Metrology, GST and other sale permissions checked | Product cannot lawfully be sold

Give every row an owner, statutory source, due-date formula, approval number, validity date and evidence link. “Consultant handling it” is not a control.

Compliance Radar can turn the business profile - state, sector, worker strength, process and licences - into an applicable compliance timeline and track regulatory changes. Check your compliance posture free before committing to a production date.

Frequently Asked Questions

Can a factory start trial production before Consent to Operate?

Do not assume so. Section 25 of the Water Act and Section 21 of the Air Act require previous consent for covered activities, and consent orders define permitted operation. Obtain written confirmation from the State Pollution Control Board or ensure the granted order expressly covers commissioning or trial runs.

Is a factory licence required below 20 workers?

Possibly. The OSH Code's central factory definition uses 20 workers with power and 40 without power, but Section 2(w) preserves a state's different pre-commencement threshold until changed. Chapter II registration also uses a 10-worker trigger for factories, and Section 81 permits wider notified coverage.

Did the OSH Code replace the Factories Act in 2026?

Yes. The OSH Code commenced on 21 November 2025 and Section 143 repealed the Factories Act, 1948. Saved state rules and earlier approvals may continue where consistent until replaced, so the practical system still combines the new Code with applicable state detail.

Does Udyam registration replace factory or pollution approvals?

No. Udyam establishes MSME status for specified benefits and schemes. It does not replace land-use permission, environmental clearance, Pollution Control Board consent, OSH registration, a factory licence, fire approval or a sector licence.

Is BIS certification mandatory for every manufactured product?

No. BIS certification is generally voluntary unless a law or current Quality Control Order makes it compulsory for the product. Check the exact product description, Indian Standard, enforcement date and exemptions on the BIS list before manufacture or sale.

Which approval should an owner apply for first?

Start with site and process feasibility: land use, scheduled-project environmental-clearance screening, factory-plan requirements and pollution category. A wrong site cannot be repaired with a later factory licence. File dependent approvals in the order required by the applicable state and sector rules.

Final Factory Compliance Requirements Check

The safest launch file is not the thickest one. It is the one that proves each factory compliance requirement was identified from the correct business facts, obtained at the right stage and converted into an operating condition with an owner.

Before production, verify site permission, factory-plan approval, environmental clearance where scheduled, CTE and CTO where not exempt, OSH registration and licensing, commencement notice, fire and equipment approvals, product licences, worker safety controls and sale permissions. Then monitor expiry dates and rule changes; approval on launch day is not permanent compliance.

Check your compliance posture free at complianceradar.in and get a timeline built around your state, industry, workforce and process.