Trade, import, export for MSMEs: The commerce department is expected to come out with the new foreign trade policy next month that may explain means to curtail the compliance burden on small exporters and provide monetary support to MSMEs to boost exports, said a report by The Economic Times. The policy may also look at the right categorisation of products grouped as “others” currently, as this causes misclassification and tax evasion that contributes to the growing trade deficit.
“We are working on ways to facilitate e-commerce exports through the policy,” the report quoted an official as saying, who added that the new policy could be released by the end of the next month.
Apart from MSME exports, the policy may also focus on developing districts as export hubs. The report noted that the commerce department is in talks with stakeholders to integrate global markets through bilateral trading arrangements, government-to-government discussions, and using the multilateral agreements of the World Trade Organization. Moreover, product and country strategies are also being looked at to diversify export products of the country.
The new policy takes shape amid the decline in the share of MSMEs in the country’s annual merchandise exports even as the latter hit a record high level in the financial year 2021-22.
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According to the data on the value of MSME exports and its share in overall exports shared by the Minister of State for MSMEs Bhanu Pratap Singh Verma in a written reply to a question in Rajya Sabha last month, MSME exports’ share dipped to 45.04 per cent in FY22 in comparison to 49.75 per cent during FY20 and 49.35 per cent during FY21 even as India’s exports jumped 34.63 per cent from $313.3 billion in FY20 and 44.5 per cent from $291.8 billion in FY21 to record $421.8 billion in FY22.
“Commodity prices and commodity exports including petroleum, steel and other metals, and food grains have jumped record high recently. In these segments MSMEs are not the key players while non-MSME exporters account for exports of petroleum products, steel, food grains etc., who have probably done exceptionally well and hence the overall share of MSME exports has come down due to this,” Ajay Sahai, Director General & CEO, Federation of Indian Export Organisations had told FE Aspire (Financial Express Online).
India’s trade deficit had widened to a record $31 billion in July in comparison to $26.18 billion in June and $10 billion during the year-ago period, according to the data from the commerce ministry.
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