New Delhi: Indian micro, small and medium enterprises are facing a tough competition from cheap Chinese products. It is evident from the high growth of India’s imports from China.
As per the information compiled from data provided by the Director General of Commercial Intelligence & Statistics, Imports in respect of 11 major product groups, largely manufactured by MSMEs in India, have grown from China at a higher rate than their respective imports from all countries combined during 2012-13 to 2015-16.
As these 11 product groups accounted for 74% of India’s total imports from China in 2015-16, a significant section of Indian small and medium firms have been adversely affected. Some of these product groups are electrical and electronics, mechanical and metallurgical, chemical, glass and ceramics.
Union Minister for MSME Kalraj Mishra had, during his recent visit to China in October 2016, invited Chinese businesses to get into partnerships with Indian businesses including MSMEs for technological collaboration and manufacturing in India. This country’s FDI policy places certain restrictions on foreign investment in certain sectors. Subject to such restrictions, foreign investors could set up enterprises in India without a lower level ceiling on investment. Such investments could be greenfield or brownfield in existing enterprises.
India has one of the most liberalized FDI policies in the world, wherein 100% FDI under automatic route is permitted in most of the sectors and for most activities. There is only a small list of sectors/activities where FDI is regulated i.e. subjected to government approval, cap or having other conditions. The FDI policy applies equally to the MSME sector.
This information was given by Minister of State for MSME Giriraj Singh in a written reply to a question in Rajya Sabha today.