In this paper, we have tried to analyze the impact of environmental regulation on the production and the quality status of manufacturing industries across Indian states. This is done to discern the effect of environmental regulation on the competitiveness of the industries across Indian states. Using Ordinary Least Squares we check for the impact of investment in pollution control and status of environmental regulation on the production of manufacturing across Indian states, thereafter, we check for the impact of these variables on the acquisition of quality status certification by the manufacturing units. The quality status certificate considered for the purpose is the ISO9000 certificate which is given to those factories, which take up all round measures in their industrial projects for quality maintenance. We have used the state-wise ASI 1997-1998 which gives the data for investment in pollution control as well as the data for ISO9000 certified units for the Indian states. Percentage of factories taken up pollution abatement facilities, percentage of capital investment of the total capital investment for pollution control and percentage of running expense of the total running expense for pollution control is used to construct a dummy variable which indicates the status of environmental regulation in a state. The OLS regression results reveal that investment in pollution control negatively affects the production of manufacturing but positively contributes to the acquisition of quality status certification by the manufacturing units in the states. Moreover, states with effective environmental…