/dqc/media/agency_attachments/3bO5lX4bneNNijz3HbB7.jpg)
Follow Us/dqc/media/media_files/w8uuiyHy7pZxl2BkUIQb.png)
NSIC Reinforces Raw Material Supply for MSMEs
According to DGFT, Ministry of Commerce and Industry, under Foreign Trade Policy 2023, duty-free import of raw materials for manufacturing export products under the Advance Authorisation Scheme is allowed for MSMEs.
To ensure a regular supply of raw materials to MSMEs, National Small Industries Corporation Ltd. (NSIC), a public sector undertaking under the Ministry of MSME, facilitates MSMEs in meeting their raw material requirements. For this purpose, NSIC enters into arrangements with bulk manufacturers for the supply of raw materials to MSMEs. NSIC also provides financial assistance to MSMEs under its Raw Material Assistance (RMA) Scheme against bank guarantee for payment to suppliers.
This scheme enables MSMEs to procure raw materials at 'nil' duty rates so that their export product can compete with their foreign counterparts in the international market. Around 24,000 such Advance Authorisations are issued by DGFT each year which amounts to an import of raw material worth 35 Billion US $ resulting in an export of 60 billion US $. Most of the beneficiaries of this scheme are MSME exporters, and this scheme has enabled MSMEs to successfully compete in the international market.
Also, under the Duty-Free Import Authorization Scheme (DFIA), MSME exporters can import raw material with complete duty exemption and such inputs can be imported even after completion of export for replenishment purposes as well. Similarly, MSME units operating as Export Oriented Units (EOU) can also secure raw materials from the international market without payment of any duty. The EOU scheme also enables MSMEs to successfully compete in the international market.
Besides, MSMEs can source raw materials from the domestic market, and Integrated Goods and Services Tax (IGST) paid on such inputs will be refunded or else recredited to them at the time of export, so that their export product remains competitive in the global market. MSMEs can thus source their inputs either from the domestic market or from the international market, with duty exemptions as provided under the Foreign Trade Policy and GST Act.