A parliamentary panel
(chaired by MP Murli Deora) has urged the CCI (Competition Commission of
India) to periodically review its regulations, improve transparency in penalty
calculations and strengthen safeguards for Micro, Small, and Medium Enterprises
(MSMEs) and startups in a report tabled in the Rajya Sabha on July 21.
The main
recommendations were:
● Competition laws must
be reviewed periodically to keep pace with rapid changes in digital markets to
ensure that the Indian market remains competitive, fair and aligned with global
standards.
● CCI should be transparent in calculation
of penalties.
● Protection to small businesses from
unfair or anti-competitive practices.
● Proposals for stricter penalties against
repeat offenders.
● Now, even as CCI stated that they have
become cautious and stepped back from industries which have their own
regulators, the panel instead recommended that CCI should, in fact, actively
partner with these specific regulators, using formal agreements like MoUs -
facilitating information sharing and better coordination.
https://www.business-standard.com/economy/news/parl-panel-flags-repeat-violations-seeks-msme-protection-in-cci-rules-126072101122_1.html
Important recent
developments that could have huge impact on operations of Indian MSMEs:
● There have been a number of issues
connected with the formalisation, regulation and subsequent modernization of
MSMEs in the recent past.
● The government of India has recently
announced a policy for e-commerce, which has significant implications for the
inventory and wholesome models for foreign retailers, that will have a direct
impact on the prospects of MSMEs. While relaxing its tightly controlled
policies for e-commerce, the Government has now allowed to purchase Indian-made
goods directly from sellers for export. Until now, these companies were largely
restricted to operating as marketplaces connecting independent buyers and
sellers. The government says the new framework will give Indian
manufacturers and smaller businesses easier access to customers across global
markets and support India's target of reaching $1 trillion in
merchandise exports by 2030. However, trader organisations are warning that
strict monitoring will be essential to ensure the export relaxation is not
misused to gain greater control over India’s domestic supply chains.
● As per the Press Release in PIB (Press
Information Bureau), the government is expanding its Free Trade Agreements
(FTAs). New policy measures have been introduced to ensure diversification of
export markets, lowering logistics costs, and boosting cross-border
e-commerce—especially for MSMEs, startups, and small artisans.
● For the Government initiatives to benefit
MSMEs, the domestic regulations need to be aligned with external trade and
economic policies. Currently there is a reservation for
MSMEs in government procurement. Opening up that sector through horizontal
commitments in the India-UK sector has been done and could represent a
potential gamechanger for local businesses. The ongoing and the recently signed
FTAs with countries like US, UK or the EU will have influence on domestic regulatory
structures.
Conclusion: The FTAs are going to have an impact on domestic
regulatory development in many respects, as the Government tries safeguarding
local industries, while aligning them with external trade commitments with key
sectors like government procurement opening to international competition.
