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The Consignment Manufacturing Agreement is essential for businesses operating in India that wish to outsource their manufacturing processes while maintaining control over raw materials and quality standards. This arrangement is particularly valuable when the principal company possesses proprietary materials or wishes to maintain quality control through material supply. The agreement, governed by Indian law, typically includes detailed provisions for material handling, manufacturing processes, quality control, intellectual property protection, and risk allocation. It's commonly used in industries where material quality is crucial to the final product, such as pharmaceuticals, electronics, and automotive components. The document ensures compliance with Indian manufacturing regulations, including the Factories Act, 1948, and relevant industry-specific regulations while establishing clear operational procedures and responsibilities for both parties.
