India Pushes For MSME-Focused Provisions In Future Trade Deals With US, EU

(MENAFN- KNN India) New Delhi, Jul 30 (KNN) Indian trade negotiators are aiming to ensure that future agreements with the United States and the European Union include dedicated benefits for micro, small, and medium enterprises (MSMEs), similar to the provisions secured in the recently signed trade pact with the United Kingdom.

According to officials from the Ministry of Commerce and Industry, India is pushing for special carve-outs that enhance MSME participation in trade and investment.

The India–UK Comprehensive Economic and Trade Agreement (CETA), signed last week, marks a significant step in this direction. A key highlight of the deal is a separate chapter devoted to MSMEs-an inclusion India actively pursued.

This chapter provides for the creation of MSME contact points in both countries, and the exchange of information related to regulations, certifications, and market access opportunities.

To further support small businesses, the agreement promotes cooperation in trade events like exhibitions and business-to-business (B2B) meets. It also addresses non-tariff barriers that often disadvantage MSMEs.

In public procurement, UK firms bidding for Indian government contracts will be classified as 'Class-II local suppliers', while Indian MSMEs retain 'Class-I' status, ensuring continued preferential treatment.

Economist Rumki Majumdar from Deloitte India noted that labour-intensive sectors-like textiles, leather, footwear, marine products, toys, sports goods, and gems and jewellery-are at the core of CETA.

These sectors, heavily reliant on MSMEs, contributed 24.6 per cent to India's exports in 2024–25, down from 30.4 per cent in 2018–19.

She emphasised that broader access to the UK market could boost employment, income, and rural MSME growth.

The agreement also encourages technical collaboration through joint training, workshops, and support for women-led and rural MSMEs.

Commerce Ministry officials confirmed that similar features are being pursued in ongoing negotiations with the US and EU.

(KNN Bureau)

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