A Beginner’s Guide to the National Guidelines on Responsible Business Conduct (NGRBC) for Indian MSMEs

In today’s fast-changing world, businesses in India—especially Micro, Small, and Medium Enterprises (MSMEs)—are under increasing pressure to operate not just profitably, but also ethically, responsibly, and sustainably.

To support this shift, the Ministry of Corporate Affairs (MCA) introduced the National Guidelines on Responsible Business Conduct (NGRBC) in March 2019. These guidelines are designed to help businesses become more aware of their social, environmental, and governance responsibilities.

Let’s explore what NGRBC is, why it matters for Indian MSMEs, and how you can start applying it in your own business—step by step.

What is NGRBC?

The National Guidelines on Responsible Business Conduct (NGRBC) are a set of 9 principles that guide businesses on how to operate with integrity, care for the environment, respect human rights, and contribute to inclusive growth.

They replaced the older National Voluntary Guidelines (NVGs) and are aligned with India’s commitments to:

• The United Nations Sustainable Development Goals (SDGs)

• The Paris Climate Agreement

• SEBI’s Business Responsibility and Sustainability Reporting (BRSR) for the top 1,000 listed companies in India

  
  

  Who Should Follow NGRBC?

  All Businesses in India – Including MSMEs

  Whether you're a manufacturer in a small town or a service provider in a metro city, NGRBC applies to all Indian businesses, regardless of size, sector, or ownership.

  Is it Mandatory?

• Voluntary for most Indian MSMEs

• Mandatory for the top 1,000 listed companies (as per SEBI’s BRSR)

• However, many large companies, public sector undertakings, and corporates expect MSMEs in their supply chains to align with NGRBC principles for ESG ratings, vendor approvals, or procurement requirements.

  
  

  That means—even if you’re not legally required to follow it, doing so can open new business opportunities.

The 9 NGRBC Principles (Explained Simply - for MSMEs)

Principle What It Means

P1 Run your business with honesty, transparency, and accountability.

P2 Offer products or services that are safe, sustainable, and high quality.

P3 Take care of your employees—including contract workers and

supply chain labor.

P4 Engage with and respect your stakeholders (customers, employees,

community).

P5 Promote and respect human rights at all levels.

P6 Protect the environment and use natural resources wisely.

P7 Be responsible when engaging with government or policy-making.

P8 Support inclusive growth and contribute to local development.

P9 Treat your customers fairly and communicate transparently.

How Indian MSMEs Can Use NGRBC for Growth

You don’t need to do everything at once. Here’s a simple roadmap for MSMEs to start with NGRBC:

1. Self-Assessment & Gap Analysis

Use the Responsible Business Assessment Tool (RBAT) from MCA or IICA to check where your business currently stands in terms of responsible practices.

2. Set Up Simple Policies

Start by drafting basic policies in areas like:

• Code of ethics

• Fair labor practices

• Waste and energy management

• Grievance handling for customers and employees

3. Start Small, Then Scale

Pick 2–3 principles that matter most to your business. For example:

• P2: Sustainable production

• P3: Employee well-being

• P6: Environmental careThen begin improving systems in those areas.

4. Train Your Staff

Organize basic awareness sessions for your team about business ethics, sustainability, and social responsibility.

5. Keep Simple Records

Start documenting your CSR or environmental efforts. Over time, prepare a simple sustainability report (you can use BRSR Lite for reference).

6. Aim for Certifications

Pursue relevant certifications that match NGRBC principles:

• ZED (Zero Effect Zero Defect) – For quality + sustainability

• ISO 14001 – For environment management

• SA 8000 – For social accountability

7. Showcase in Branding

Highlight your sustainable and ethical business practices in:

• Your packaging

• Website and social media

• Customer communications

8. Reach Out for Support

Connect with:

• Industry associations (like CII, FICCI, ASSOCHAM) for training support

• Connect with NGOs, Consultants for taking benefits of government schemes.

Why NGRBC is a Game-Changer for Indian MSMEs

Here’s how adopting NGRBC can directly benefit your business:

1. Better Market Access

Large companies and global buyers prefer MSMEs that follow responsible business practices.

2. Improved Brand Reputation

Consumers—especially in cities and export markets—trust businesses that are ethical and sustainable.

3. Access to Finance & Investors

Banks, NBFCs, and ESG-focused investors give preference to businesses with good governance and sustainability practices.

4. Stay Ready for Future Regulations

MSMEs following NGRBC today will be well-prepared for tomorrow’s legal and global compliance standards.

5. Attract & Retain Talent

Young professionals want to work with companies that care about people, ethics, and the environment.

6. Save Costs

Energy-efficient and inclusive practices often result in cost savings and better operations.

7. Stronger Community Connections

When you invest in people and the local community, you build lasting goodwill and local support.

Tools & Resources for Indian MSMEs

Resource Purpose

RBAT Self-assessment on responsible business conduct

BRSR Lite Simplified ESG report format for unlisted MSMEs

ZED Certification Government program for sustainable

manufacturing

Industry Associations

/Consultants Training, events, and expert support on NGRBC

To conclude...

The NGRBC isn’t just another government guideline—it’s a powerful tool to transform Indian MSMEs into future-ready, ethical, and respected businesses.

There is no need to change everything overnight. Start small. Focus on a few principles. Train the team. And watch how responsible business conduct helps Indian MSME's grow smarter, attract better clients, and build long-term success.