ISID Director Calls for Colour-Coding Imports to Boost MSMEs Hit By Trump Tariff

New Delhi, Jan 7 (KNN) As micro, small and medium enterprises (MSMEs) are among the worst-affected by Trump tariffs, there is need to focus on boosting domestic market by taking policy actions such as mandatory colour-coding of goods imported from other countries particularly China and requiring big retailers to export MSME-made Indian goods.

While giving these suggestions to boost local manufacturing, noted economist and Director of Institute for Studies in Industrial Development (ISID) Dr Nagesh Kumar said that colour-coding of Made-in-India goods and imported goods would not require any legislative change and can be easily done by just issuing necessary guidelines.

The ISID Director recommended that while Made-in-India products could have green colour coding, those imported from China may have red colour.

He noted that a performance requirement could be put in place for big retailers like Amazon and Flipkart to export MSME-Indian goods in lieu of cheap imports from China.

"This is a simple performance requirement which is consistent with WTO rules," he said while speaking at national conference on strengthening the legal and regulatory architecture for growth of MSMEs jointly organised by Federation of Indian Micro and Small & Medium Enterprises (FISME) and Friends of MSMEs in Parliament.

Dr Kumar underlined that the dream of developed India can't be realised without a strong and vibrant MSME sector driving the inclusive development and creating many jobs for the youth.

He said that while the government is negotiating a trade deal with the US, there is a need to diversify India's export markets but that would take time and happen only gradually.

"What we need to do is to focus on our domestic market. We find that our domestic market has been encroached upon by the cheap dumping from next-door China," the economist said.

He highlighted that the worst-affected sector from Trump tariff is MSME because the tariff applies to different products India exports except for pharmaceuticals and electronics.

The share of US in India's exports is about 20% but it is 33% for certain labour-intensive industries like gems and jewellery, textile and clothing, food processing and leather goods.

"For these products the exposure to the US is much higher than the rest of the exports. These labour-intensive industries are largely dominated by MSMEs. So MSMEs are worst-affected from Trump tariffs among all other sectors," Dr Kumar said.

(KNN Bureau)