Piyush Goyal, Commerce Minister of India, has stated that the tariff concessions under the Free Trade Agreements (FTA) extend export opportunities for various products, including those offered by SMEs. India’s trading partners as per the trade agreement are Japan, South Korea, and some other ASEAN countries.
With regards to the agreement, SME products such as readymade garments, leather goods, processed food, and engineering products (auto components and more) get concessions. Further, MSME-focused export promotion schemes include participation in training programmes on the packaging for exports, the Market Development Assistance (MDA) Scheme for MSME exporters, and distributing national awards for quality products.
Currently, MSMEs contribute about a 49% share of the country’s total exports. Nitin Gadkari, MSME Minister, revealed that the government is targeting to increase this up to 60%. As per the government data, India’s total exports stands at $24 billion as of October 2019.
Recall that the government had introduced the Foreign Trade Policy (FTP) in 2015 to increase exports of goods and services, as well as create employment. Consequently, the World Bank has analysed various factors and shifted India’s ranking from 122 to 68 this year.
The minister also referred to the Interest Equalisation Scheme on pre- and post-shipment rupee export credit launched in 2015. The scheme aimed to give interest equalisation at 3% for labour intensive and MSME sectors in November 2018. The merchant exporters were covered under the programme from January 2019.
Piyush Goyal made a statement at the meeting with BRICS ministers to express that the protectionism, in the form of non-tariff barriers (NTB), have been blocking market access to MSMEs in developing countries. Developing countries are creating the barrier, he said.
He condemned the fact that the developed countries talk about open and free trade for developing countries. But, they impose increased barriers in the form of the non-tariff obstacles leading to economic uncertainties and increased the cost of trade in developing and least developed countries.
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