How India’s Free Trade Agreements Could Benefit SMEs?

How India’s Free Trade Agreements Could Benefit SMEs? - Learn More Here  How India’s Free Trade Agreements Could Benefit SMEs? 7 1 e1576714267332
How India’s Free Trade Agreements Could Benefit SMEs? – Learn More Here

According to India’s Commerce & Industry Ministry, the Free Trade Agreements (FTAs) signed by India provide tariff concessions thereby giving opportunities for exports of products including those related to Small and Medium Enterprises (SMEs).

Some of the SME products on which tariff concessions have been provided by trading partners such as Japan, South Korea and some ASEAN countries fall into the category of readymade garments, leather goods, processed foods and engineering products like auto components, stated the ministry on 11th December.

The specific export promotion schemes for micro, Small and Medium Enterprises (MSMEs) include those for participation in international exhibitions and fairs, training programme on packaging for exports, Market Development Assistance (MDA) Scheme for MSME exporters and National Award for quality products.

Trade Infrastructure for Export Scheme (TIES) was launched with effect from 1st April 2017 to address the export Infrastructure gaps in the country.

Interest Equalization Scheme on pre and post shipment rupee export credit was introduced from 1.4.2015 providing interest equalisation at 3% for labour intensive / MSME Sectors.

The rate was increased to 5% for MSME Sectors with effect from 2.11.2018 and merchant exporters were covered under the scheme with effect from 2.1.2019.

The Government has also taken the following key steps to boost India’s trade and competitiveness:

The new Foreign Trade Policy (FTP) 2015-20 launched on 1st April 2015 provides a framework for increasing exports of Goods and Services as well as generation of employment and increasing value addition in the country, in line with the Make In India, Digital India, Skills India, Startup India and Ease of doing business Initiatives. The policy rationalized the earlier export promotion schemes for increasing export of goods and services.

A new logistics related division was created in the Department of Commerce to coordinate integrated development of the logistics Sector. India’s rank in World Bank’s Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.

Various measures for improving Ease of Doing Business were taken. India’s rank in World Bank Ease of doing business ranking improved from 142 in 2014 to 63 in 2019 with the rank in ‘trading across borders’ moving up from 122 to 68.

A comprehensive agriculture Export Policy was launched on 6th December, 2018 with an aim to provide an impetus to agricultural exports.

Transport and marketing Assistance (TMA) has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.