Worldwide, the micro, small and medium enterprises have been accepted as the engine of economic growth and the foundation for promoting equitable development. These enterprises constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. According to the United Nations, MSMEs represent 90% of businesses, generate 60% to 70% of employment, and contribute 50% of global GDP. These enterprises are not just economic entities but the backbone of societies, fostering livelihoods and driving inclusive growth, especially among the working poor, women, youth, and vulnerable communities.
In India, the sector is referred to as Micro, Small and Medium Enterprises (MSMEs). MSMEs play a pivotal role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. MSMEs are complementary to large industries as ancillary units and this sector contributes significantly in the inclusive industrial development of the country. The MSMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets. Recognizing the importance of MSME sector in India, the Government of India passed the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 which came into force on 2nd October 2006. After the enactment of MSMED Act 2006, a 2 separate Ministry of Micro, Small and Medium Enterprises (M/o MSME) was formed on 9.5.2007 by the merger of erstwhile Ministry of Small Scale Industry (SSI) and Ministry of Agro & Rural Industries (ARI).
E-COMMERCE EXPORTS & MSME
The Foreign Trade Policy (FTP) 2023 has a stated objective to enable cross-border E- Commerce for artisans, weavers, craftsmen and MSMEs, in coordination with stakeholder Departments.
High potential export products which MSMEs should focus on:
- Textiles, handloom and apparel
- Leather & Leather goods
- Handicrafts and Home Décor
- Beauty and Personal care
- Semi-precious jewellery & accessories
- Automotive parts
- Ayush and Herbal products
- Spices and food products
- Tea and Coffee
- Engineering goods
- Religious artifacts
Regulatory Requirements for exports:
- The export of goods is governed by the export policy notified by Director General of Foreign Trade (DGFT), from time to time.
- Exporters must be well aware of the export policy related to their products.
- Based on the Indian Tariff Classification (Harmonized System) [ITC(HS)] classification the regulatory requirements for export from India and requirements at buyers’ country need to be confirmed.
- On the basis of the ITC(HS) classification, the Export Policy broadly classifies the goods as ‘Free’, ‘Restricted’ and ‘Prohibited’.
i. Free – All goods can be exported freely if they are not mentioned specifically in the Export Policy (Schedule-II) of ITC(HS) 2022.
ii. Restricted – An Export Authorization is required to export restricted goods, and must be exported as per the procedures/conditions specified.
iii. Prohibited – These items cannot be exported at all.
- Certification Requirement is applicable on the exported products. For e.g. for pharma exports, certification is required from Central Drugs Standard Control Organisation (CDSCO) etc.
- The documentation required for undertaking E-Commerce Exports from India -Permanent Account Number (PAN), Bank Account & Authorized Dealer (AD) Code of the concerned bank branch, Goods & Services Tax (GST) Number, Importer-Exporter Code (IEC)
- Product-specific permissions and documentary requirements may vary for different products.
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