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Yash Ved, Mumbai October 13 , 2020
The Federation of Pharmaceutical Merchant Exporters and Allied Products (FPME) has urged Nitin Gadkari, Union minister for MSME, to provide a separate national industrial classification (NIC) code exclusively for merchant exporters irrespective of any product or product group and remove the exclusion from NIC Division 46 for exporters who are bringing into India the much needed foreign exchange.

Currently, India’s merchandise exports is combination of manufacturer based exports as well as merchant exporters who contribute significantly. Most of these merchant exporters are actually within the limits and framework of MSME, however they do not get the due recognition.

"We were delighted to note the support and proactive measure in re-defining the definition of MSME done by you during the lockdown. Also, in the post-lockdown, the initial announcement to increase the limits and exclusion of export turnover is certainly providing boost to the MSME business,” stated Kamlesh Shah, chairman, FPME.

Shah added, “However, we are shocked and our happiness has turned into sadness. Based on the definition under MSME, the person is still required to select the NIC code. These codes are different for manufacturing activities and for service providers. Also, there is an exemption list vide office order memorandum dated 27 June, 2017 which covers certain list of NIC codes which would not be included in manufacturing or service and thus, are sort of a negative list under MSME registration.”

Under Division 46 of NIC code, wholesale trade is except of motor vehicles and motorcycles. This division includes wholesale trade on own account or on a fee or contract basis (commission trade) related to domestic wholesale trade as well as international wholesale trade (import/export).

Wholesale is the resale (sale without transformation) of new and used goods to retailers, business-to-business trade, such as to industrial, commercial, institutional or professional users, or resale to other wholesalers, or involves acting as an agent or broker in buying merchandise for, or selling merchandise to, such persons or companies.

“We cater to the specific product group of pharmaceutical and allied products which has high demand internationally and global reach. However, it does require significant regulation and procedural requirements. Thus the exporters require long term gestation period and support requirement in various methods are required. MSME registration is a very important tool, However, due to the above condition, we are not eligible for the said registration,” stated FPME.

FPME stated that many of the members are only in to exports and thus will be technically only a “micro” unit but would not get registration due to the above office memorandum and non availability of NIC code for “Merchant Exporters”.

“With government’s initiative to promote local and become global, “Merchant Exporters” play a very important role. Supporting them with their true classification as “MSME” and making them eligible for the supported benefits and privileges as MSME,” added Shah.

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