Import of Chinese goods hurting MSMEs

Source: PIB, Government of India

The Micro, Small and Medium Enterprises (MSMEs) are facing tough competition from cheap Chinese products as is evident from the data of India’s imports from China. According to the data compiled by Director General of Commercial Intelligence & Statistics in respect to 12 major product groups, largely manufactured by MSMEs in India whose imports from China grew at a higher rate than their respective imports from all countries combined during 2011-12 to 2014-15. As these 12 product groups accounted for 74% of India’s total imports from China in 2014-15, a significant proportion of Indian MSMEs seem to be adversely affected from Chinese imports. These product groups pertain to electrical and electronics, mechanical and metallurgical products on the one hand and chemical, glass & ceramics based products on the other. The government has been imposing anti-dumping duties, permitted under the WTO, for restricting imports when such imports have been established as unfairly affecting the market for goods and services produced by Indian industries. This mechanism is operated by Directorate General of Anti Dumping and Allied Duties (DGAD). As per Foreign Trade Policy-2015-20, domestic laws /rules/ orders/ regulations/ technical specifications/environmental/ safety and health norms are applicable to domestically produced goods, mutatis mutandis, to imports unless specifically exempted. The government also imposes safeguard duties to protect domestic industries against a surge of imports from other countries. This mechanism is operated by Directorate General of Safeguards (DGSG). The government has been implementing various schemes/programmes to deal with this problem and help the micro, small and medium enterprises for effectively competing with imports from China and other countries. Some of these schemes/programmes include National Manufacturing Competitiveness Programme (NMCP); Credit Guarantee Scheme; Credit Linked Capital subsidy Scheme; Cluster Development Programme; Market Development Assistance Scheme and Vendor Development Programme for Ancillarisation. These schemes/programmes help MSMEs growth, increase their competitiveness to challenge cheap Chinese imports in the country. This information was given by the Union Minister for Micro, Small & Medium Enterprises, Kalraj Mishra in a written reply to a question in Lok Sabha here on Monday.    

August 10, 2015 | 5:35pm IST.