MSME body concerned over FTA impact on sector

Joins hands with 2 international agencies for capacity building

The impact of Free Trade Agreements (FTA) on the domestic micro, small and medium enterprises (MSME) and the general ignorance among the micro and small businesses about the concept has prompted MSME chamber Indian Industries Association (IIA) to seek remedial measures.

IIA has joined hands with two international agencies for capacity building in the sector regarding the understanding and relevance of FTA to MSMEs.

The international agencies are Traidcraft, a UK-based non-governmental organisation fighting poverty through trade, and Third World Network, an international network of organisations/individuals involved in development issues.

A toolkit will be developed on FTA, case studies conducted and awareness building workshops organised for MSMEs jointly by the three partner organisations.

“A number of FTAs are being signed between countries, which have a strong impact on the MSMEs. However, the knowledge regarding FTAs are limited to few stakeholders, which excludes the MSME sector,” IIA Executive Director D S Verma said.

He said FTA negotiation processes are generally kept secret with limited stakeholder consultations.

“India has also signed a number of FTAs which when implemented will have a strong impact on the MSME sector, but ironically the micro and small entrepreneurs are mostly unaware of it,” Verma added.

Besides, the agreements are quite difficult to understand, especially for micro and small entrepreneurs/businesses, along with farmers, women groups, indigenous communities). There are interlinked chapters in FTAs, which have important relevance for the sector, he underlined.

FTAs are generally mutual agreement between countries to remove trade barriers to facilitate bilateral trade. Many governments, throughout the world have either signed FTAs or are negotiating new bilateral free trade and investment agreements.

“Educating MSMEs on FTAs is vital in the present global free market economy. We cannot afford ignorance in any aspect of economy and trade in this era of stiff competition,” IIA President Anil Gupta said.