Govt ends product reservation for MSEs, de-reserves remaining 20 items

The government has decided to deserve remaining 20 items currently reserved for exclusive manufacture by micro and small enterprises (MSE) sector, opening the businesses to bigger corporate, including multinationals.

Accordingly, the production and marketing of pickles and chutneys, bread, mustard oil (except solvent extracted), groundnut oil (except solvent extracted), wooden furniture and fixtures, exercise books and registers, wax candles, laundry soap, safety matches, fire crackers, agarbatties, glass bangles, steel almirah, rolling shutters, steel chairs (all types), steel tables (all types), steel furniture (all other types), padlocks, stainless steel utensils, and domestic utensils (aluminium), can now be taken up by bigger corporates.

An official release said the policy initiatives have been taken to encourage greater investment, including in the existing MSME units, to incorporate better technologies, standard and brand building to enhance competition in Indian and global markets for these products.

The decision follows the report of an advisory committee constituted to evaluate products reserved for exclusive production by micro and small enterprises.

The government has been opening up its economy since 1991 through a policy which led to de-licensing of items. Over the years list of items reserved for manufacture by MSE sector has been reduced from over 800 to 20.

The advisory committee in its meeting, held on 20 October 2014, noted that with the import liberalisation, all remaining items are allowed to be imported and there remained no justification for continuation of reservation of manufacturing in the MSE sector since such reservation may only inhibit the possibilities based on technologies, economy of scale, etc vis-à-vis the imported items.