Foreign Investment in MSMEs sector

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The Ministry of Micro, Small, and Medium Enterprises (MSME Registration) runs a number of initiatives and plans for the country’s MSME sector’s growth. The government has implemented an investor-friendly policy to encourage foreign direct investment (FDI), with the exception of a few strategically important sectors/activities, all of which are open to 100% FDI under the automatic route, subject to sector-specific laws, regulations/rules, security conditions, and state/local/laws and regulations. Know about some of the most important and beneficial initiatives for the MSME Sector through this article.

Know about FDI

As an enabling policy, Foreign Direct Investment (FDI) is applied across the board, regardless of the size of the investee entity. The government has implemented an investor-friendly policy to encourage foreign direct investment (FDI), with the exception of a few strategically important sectors/activities. However, From a competitiveness and viability standpoint, the Ministry has not performed any detailed research on the pros and cons of foreign investment in the MSMEs sector. Minister of State for Micro, Small, and Medium-Sized Enterprises Shri Bhanu Pratap Singh Verma provided this information in a written response to the Rajya Sabha.

Number of initiatives for MSMEs to promote self-reliance

  • Under the Emergency Credit Line Guarantee Scheme (ECLGS), businesses, especially MSMEs, can get immediate loans of up to Rs. 5 lakh crore without having to put up any collateral. Know more about it at:  ECLGS Scheme for MSME Registration extended upto next year 
  • Self Reliant India Fund’s equity investment of Rs. 50,000 crore. The Government of India has allocated Rs. 10,000 crore toward this scheme’s corpus.
  • Updated criteria for identifying micro, small, and medium-sized enterprises.
  • Fresh ‘Udyam Registration‘ for Micro, Small, and Medium-Sized Enterprises to facilitate Ease of Doing Business.
  • For purchases under Rs. 200 crore, international bids are not required.
  • Including retail and wholesale businesses in the definition of MSMEs as of July 2, 2021.
  • In the event that an MSE’s tax position improves, they will get non-tax benefits for an additional three years.
  • Introduction of MSME Sustainable Certification Scheme
  • As a result of integrating Udyam Portal and NCS of the Ministry of Labour & Employment, registered MSMEs may now access NCS to conduct candidate searches for open positions.

Take a call from Expert

Is factory license mandatory for msme sector in india

Moreover, if you require any kind of guidance related to the MSME Registration, please feel free to contact our business advisors at 8881-069-069.

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