India's Push To Promote Small Businesses UPSC NOTE

  India's push to promote and empower small businesses (MSMEs) during the G20 trade summit Trade and investment Ministers of the G-20 na...

 India's push to promote and empower small businesses (MSMEs) during the G20 trade summit

• Trade and investment Ministers of the G-20 nations concluded their deliberations under India’s presidency of the bloc.

• The government counted five concrete and action-oriented deliverables from the meet, including a dialogue on global standards to bridge regulatory divergences across countries and a compendium on best practices for mutual recognition of qualifications for professional services such as medicine, law and nursing.

• Asserting that the trade track outcomes were the most significant so far in the G-20 parleys.

• Commerce and Industry Minister highlighted the other three deliverables as new elements that hold importance for India. 

• A generic framework to map global value chains.

• To identify the weakest links and mitigate any shocks like those seen during the pandemic.

• It is a good idea that may prove tricky to execute. 

• Digitalisation of trade documents

• To ease flow of goods and services.

• But the principles identified in the pact pertain to paperwork on transactions such as transport, insurance, and storage, “not necessarily” to government filings for cross-border trade.

• What has been coined as the ‘Jaipur Call for Action to enhance Micro, Small and Medium Enterprises’ (MSMEs’) access to information’ may yield quicker and more tangible results. 

• The International Trade Centre, WTO and UNCTAD, which operate the Global Trade Helpdesk, have been urged to work with G-20 members to upgrade their data portal for businesses and bridge the “information asymmetry” that often hinders small players.

• This resonates with Prime Minister Narendra Modi’s plea that G-20 Ministers strive to help MSMEs which account for 60%-70% of employment and 50% of the global GDP, integrate with global value chains as empowering them translates to societal empowerment. 

• India, on its part, must also consider steps to bolster the capacity of its small enterprises. 

• For one, its nudge for greenfield investments through productivity-linked incentives across sectors, can be tweaked to create a separate window for fresh outlays by MSMEs that cannot qualify for incentives based on larger investments.