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Centre removes 20 vital items from exclusive MSME manufacturing list

Opening up small business units making products like pickles and candles for large investors, government on Monday removed all restrictions that reserved 20 such items for exclusive manufacturing by the MSME sector. Manufacturing of 20 products including bread, wooden furniture, wax candles, laundry soap, safety matches, fire works and agarbatties were reserved for micro and small enterprises so far.

“The policy initiatives have been taken to encourage greater investment, including the existing MSME units, to incorporate better technologies, standard and branch building to enhance competition in Indian and global markets for these products,” the Commerce and Industry Ministry said in a statement.

It said that over the years the list of items reserved for manufacture by MSME sector has been reduced from over 800 to 20. The advisory committee in its meeting in October last year noted that with the import liberalisation, all remaining items are allowed for imports. “Thus, there is no prima facie justification for continuation of reservation of manufacturing in the MSME sector since such reservation may inhibit the possibilities based on technologies, economy of scale, etc.
vis-a-vis the imported items,” it said.

“Government of India...has decided to deserve remaining 20 items presently reserved for exclusive manufacture by MSME sector,” it added. The other items include pickles and chutneys; mustard oil; ground nut oil; wooden furniture and fixtures; exercise books and registers; glass bangles; steel almirah; rolling shutters; all types of steel chairs, tables and furniture; padlocks; stainless steel utensils and aluminium utensils.
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