New Delhi: As global geoeconomic uncertainty and tariff wars disrupt supply chains, the government has started reviewing the scheme that offers incentives to small businesses to develop international business relations.
The ministry of micro, small & medium enterprises (MSMEs) has begun reviewing its 2019 International Co-operation Scheme, according to two people aware of the development. The scheme provides financial aid to industry associations, and state and central government organisations that promote the MSME sector.
The review will cover the participation of MSMEs in the scheme to examine whether the implementation has had a positive impact on the sector, especially on first-time exporters, the people mentioned above said.
The assessment is in its initial stages, one of the people said.
The scheme reimburses airfares, rent for showcase spaces, and visits to international conferences by representatives of the MSME sector. It also refunds costs to conduct international seminars and conferences. It also provides benefits for capacity building to first-time exporters.
A query emailed to the MSME ministry on 31 July remained unanswered.
In FY24, the government assisted 545 MSMEs under the scheme with a support of ₹19.22 crore, according to a Lok Sabha disclosure in March 2025. India’s MSMEs contribute to about 45% of the country’s exports.
MSMEs must register to receive benefits under the scheme. For instance, a company must be registered under the Companies Act, and a society needs to be registered under the Societies Act. But once registered, they must fulfil regulatory compliance requirements and may not have adequate financial resources for that, according to reports by multiple lenders.
Closer scrutiny
Mint reported in March that government officials scrutinise MSMES more closely when securing registration under the goods and services tax (GST) regime.
Under the International Co-operation Scheme, MSME industry associations can participate in three events in a year, and in the same event for three years at a stretch. After three consecutive years of participation, MSMEs or their industry associations can participate in an event after a gap of two years.
First-time exporters can get financial assistance for securing registration-cum-membership certificates in export promotion councils and paying fees for quality certification of exports.
MSMEs have been facing export-related concerns.
“The sector needs to be provided with better market access facilities to sustain and further enhance its contribution towards output, employment generation and exports. However, currently lot of MSMEs do not have a clear strategy for effective sales promotion because they lack the resources and knowledge for it,” said the 2019 expert committee report on MSMEs led by UK Sinha.
Small Industries Development Bank of India (SIBDI) said in its recent outlook that trading MSMEs may have apprehensions about the constantly changing global tariff regime impacting their margins.
“About 40% of exporters were affected directly or indirectly by ongoing tariff issues,” the small business lender said in its MSME Survey Outlook for April-June 2025. Both the manufacturing and services sector MSMEs have been impacted by tariff-related global trade headwinds, the report said.
MSME, International Co-operation Scheme, financial aid, global geoeconomic uncertainty, exports
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