Holding Chinese Goods At Ports Will Harm Indian Importers, Says Gadkari 

Stopping imports from China at domestic ports will lead to losses for those Indian businesses that placed orders prior to border clashes, according to Nitin Gadkari, Union minister for micro, small and medium industries.

The MSME Ministry is actively working with the finance and commerce ministries to resolve this issue, Gadkari said in an interview to Quintillion Media’s Editorial Director Sanjay Pugalia. Indian entrepreneurs placed import orders with Chinese companies through letters of credit and other mechanisms before the border clashes arose, he said. As such, goods may take more than a month’s time to arrive in India and local businesses will suffer if goods remain stuck or are returned because they originated in China, Gadkari said.

The government, Gadkari said, can think of imposing restriction or duties on future imports.

The two south Asian nations are embroiled in a border standoff that killed 20 Indian and an unknown number of Chinese soldiers earlier this month. India, according to a Bloomberg report, is planning to impose stringent quality control measures and higher tariffs on imports from China.

China is India’s biggest source of imports, with purchases including electronic goods, industrial machinery, organic chemicals and pharmaceutical ingredients running into almost $70 billion last year. This comes at a time India is heading toward its first full-year contraction in more than four decades after the country was put into the world’s biggest lockdown to contain the coronavirus pandemic.

Gadkari said India has achieved a daily capacity of manufacturing more than five lakh personal protective equipment, and reduced its dependence on imports from China. India needs to encourage local entrepreneurs through appropriate changes in import-export policy, he said.

The government is actively taking steps to address the problems of the MSME sector. He outlined the initiatives taken to assuage the impact of the virus outbreak on Indian MSMEs:

• A special package of Rs 3 lakh crore intending to benefit 45 lakh MSME businesses has been launched by the government. Industries having an investment up to 25 crore and turnover up to Rs 100 crore will be provided an additional 20% collateral free loan over their existing limit without any additional charge.
• The government has set up a subordinate debt fund having a corpus of Rs 20,000 crore for the benefit of MSMEs.
• The ministry will rate MSMEs on the basis of their turnover, exports, profitability and track record of filing goods and services tax and income tax returns.
• MSMEs fulfilling certain benchmarks will be allowed to raise funds by listing in the capital markets on a dedicated MSME exchange.
• The government may also infuse up to Rs 15 crore as equity prior to the issuance and can reap profits after their shares list at a premium.
• An online dedicated portal, Champion, has been set up to allow MSMEs to raise their grievances electronically.

Besides, to reduce or minimise fuel imports, the government is trying to promote liquefied natural gas and electric vehicles, Gadkari said.