'Will encourage FDI in MSME'

The minister said doubling the budgetary allocation for the sector in the 12th Plan was another priority

The new minister for micro, small and medium enterprises (MSME), K H Muniyappa, on Wednesday said foreign direct investment (FDI) into the sector would be encouraged. He, however, clarified it would not be at the cost of domestic players in the sector.

Speaking to Business Standard, Muniyappa said: “I am in favour of FDI in the MSME sector, which contributes 40 per cent to India’s exports. FDI, in general, is essential for the country. The Opposition is opposing it just for the sake of it.”

A ministry official who accompanied the minister during his maiden visit here said a comprehensive plan on the issue was yet to be prepared. “FDI and investments from the private sector can be possible in the sector in the marketing segment, which is currently weak. Further, it can be considered in the Khadi Reform Development Programme, in which 51 per cent would come from the private sector. The private sector can have a joint venture in marketing with FDI partners,” the official said.