We all are aware of the role of MSMEs in shaping the Indian economy and now they also have various opportunities to tap globally. The Government of India has been consistently working with various countries such UK, Japan, Australia, the UAE, the European Union and many other countries for Free-Trade Agreements (FTAs). This is aimed to provide diverse export opportunities and open a wide market for MSMEs in India.
Watch Sanjay Notani, Partner, Economic Laws Practice (ELP) on LawWiser’s explainer on How MSMEs can be part of a Global Value Chain.
Sanjay very interestingly shares some key data providing insights on MSME about the MSMEs, how they constitute nearly 40 per cent of total exports, and more than half of them
are located in rural India. As per the data, India’s share of overall export to the USA is 15.30%, UAE 11.50%,
Hong Kong 4.60%, China 3.60%, and the United Kingdom 3.40%, respectively 7 and 40%
of this total export was by MSMEs. Out of all the existing MSMEs, 31% are engaged in the manufacturing sector and the remaining others are engaged in the service sector. Out of these 69% service sector MSMEs, almost 36% are engaged in trade.
He also shares the challenges faced by MSMEs and the steps taken by the Govt. He starts by highlighting the pain points of the market and taking us through the aspects of special and differential treatments. Aspects relating to Ethical Trade Imperatives (ETI) are also discussed. ETI imposes additional compliance burden through requirements such as those related to (not indulging in) child labour, observing work hours, health and safety of workers, wages and environment.
Lastly, he takes us through the geopolitics impact on the Indian MSME. India’s exports to Ukraine and Russia have mostly been led by MSMEs and hence, the current crisis may hit MSME exporters with multiple challenges such as delay in shipments, late payments, damage to consignments, and more.
Sanjay discusses all this and much more interesting aspects about how MSMEs can be part of a global value chain, watch the full video now.