FISME seeks sectoral export studies, testing overhaul to boost MSME trade | Economy & Policy News

The Federation of Indian Micro and Small & Medium Enterprises (FISME) has urged the government to undertake market-specific studies across 10 priority sectors to help micro, small and medium enterprises (MSMEs) understand the tariffs, regulatory requirements and compliance costs involved in exporting to key trading partners and make better use of India’s free trade agreements (FTAs).

 

In a memorandum submitted to Commerce and Industry Minister Piyush Goyal on November 9, the industry body also proposed an inter-ministerial mechanism led by the Department of Commerce to align India’s existing testing infrastructure with the requirements of overseas markets.

 

FISME said preferential tariffs under free trade agreements (FTAs) alone may not be enough to boost MSME exports, as smaller firms face additional costs related to product testing, certification, rules of origin, labelling and packaging. These expenses can reduce the benefit of lower import duties, particularly for smaller consignments.

  

The proposed studies should cover major export markets such as the European Union (EU), the US, Canada and Australia. The 10 sectors should be selected separately for each market based on demand, tariff benefits, domestic supply capacity and MSME participation.

 

An indicative list of sectors includes textiles and garments, leather and footwear, agricultural products, processed foods, chemicals, engineering goods, automotive components, electronics and pharmaceuticals.

 

The studies should provide product-level information on preferential tariffs, rules of origin, mandatory quality and safety standards, registration and labelling requirements, and the cost of meeting these conditions. They should also identify Indian laboratories whose test reports are accepted in the destination markets and highlight gaps where domestic testing facilities are inadequate.

 

The studies should also include a searchable directory of Indian testing laboratories, certification agencies and technical institutions, detailing their capabilities, accreditation, acceptance in destination markets, indicative fees and turnaround times. This would help MSME exporters identify where they can get their products tested and certified in India before shipping them overseas.

 

FISME has also called for a review of India’s existing testing infrastructure, involving the Ministry of MSME, sectoral ministries and relevant standards and accreditation bodies.

 

It has recommended upgrading existing laboratories, expanding their testing capabilities and improving turnaround times before setting up new facilities. The proposed mechanism should also explore mutual recognition arrangements with trading partners so that tests conducted by recognised Indian facilities can be accepted in overseas markets.

 

To reduce the compliance burden on smaller exporters, the industry body has suggested transparent testing fees, pooled procurement of testing services and targeted financial assistance through compliance vouchers.

 

The proposals are aimed at addressing the regulatory and testing-related barriers that can prevent MSMEs from converting tariff concessions under India’s trade agreements into actual export orders.