Trade, import and export for MSMEs: Minister of State for MSMEs Bhanu Pratap Singh Verma informed Lok Sabha on Thursday the MSME ministry does not maintain data with respect to the effect of raw material prices on production or aggregate demand of MSME products. The minister was responding to a question on whether the government is aware of the price of raw materials such as metals, plastics, etc., for MSMEs and if so, whether the raw material prices have affected MSMEs’ production.
Verma said the government has taken several steps for raw material support to MSMEs such as providing financial assistance under the Raw Material Assistance (RMA) Scheme of National Small Industries Corporation Limited (NSIC), exemption on basic custom duty on steel scrap till March 31, 2023, TMT bars below 8 mm exempted from the purview of the Quality Control Order and waived off import duty for several raw materials like coking coal, ferro-nickel etc.
Also read: 57% of the MSME owners struggle to get new orders for their merchandise: BYST Report
Importantly, the annual rate of inflation based on the Wholesale Price Index (WPI) stood at 4.95 per cent for December 2022 over December 2021 against 5.85 per cent recorded in November 2022 and 8.67 per cent in October 2022, reflecting a decline in commodity prices.
According to a commerce ministry’s statement, the decline in the rate of inflation in December 2022 was primarily led by a fall in prices of food articles, mineral oils, crude petroleum & natural gas, food products, textiles and chemicals & chemical products. WPI is the amount wholesalers or factories pay. A rising WPI indicates wholesalers are paying more for raw materials.
Also read: 43% of MSMEs likely to remain below pre-Covid EBITDA margins in FY23: Crisil
Meanwhile, India last year had signed two trade deals with the UAE and Australia. Particularly with respect to the trade deal with Australia — India has offered concessions on tariff lines of products including coking coal and thermal coal, wines, agricultural products including cotton, almonds shelled and in shell, oranges, etc., metals including aluminium, copper, nickel, iron and steel, and minerals such as manganese ore and calcined alumina.
Merchandise imports from Australia consist largely of raw materials, minerals and intermediate goods. 74 per cent of it is coal and 71 per cent of coal is coking coal other than tanning, dyeing extracts, pigments, which will help Indian MSMEs and others in sectors such as steel, aluminium, garments, etc., to become competitive in manufacturing with 90 per cent value of imports from Australia getting zero duty access to the Indian market.
The 2nd edition of FE Aspire’s SMExports Summit is here. Register now to book your seats!