SCHEME FOR MARKET DEVELOPMENT ASSISTANCE FOR MSME EXPORTERS (MSME - MDA)

A Market Development Assistance Scheme is currently operated by the Ministry of Commerce with a view to encourage exporters (including MSME exporters) to access and develop overseas markets. The scheme offers funding for participation in international fairs, study tours abroad, trade delegations, publicity, etc. Direct assistance under MDA for small- scale units is given for individual sales-cum-study tours, participation in fairs/exhibitions and publicity. SIDBI operates a scheme of direct assistance for financing activities relating to marketing of MSME products.

The Office of DC(MSME) has an existing scheme for participation in international fairs, whereby MSME entrepreneurs are encouraged to display their products at international exhibitions abroad. SIDO provides exhibition space and shipment of exhibits ex-Mumbai free of cost for this purpose.

As part of the comprehensive policy package for promotion and development of MSMEs announced on 30^th August 2000, it was decided that the Small Industries Development Organisation should have a Market Development Assistance (MDA) scheme similar to the one obtaining in the Ministry of Commerce. It should be a Plan Scheme.

In pursuance of the above announcement and in recognition of the fact that (i) MSME exporters need to be encouraged in their efforts at tapping and developing overseas markets; and (ii) SIDO's participation in international fairs, if coupled with the presence of actual exporters, would lead to substantial increase in export business, it has been decided to operate a new scheme called MSME Exporters Market Development Assistance (MSME-MDA) Scheme .

The scheme to be operated in addition to the existing SIDO scheme for participation in international fairs will cover all activities for which direct assistance is given under the existing MDA scheme of the Ministry of Commerce. In addition, the scheme would also provide for financial assistance for commissioning market study reports and for initiating/contesting anti-dumping cases. The scheme came into operation w.e.f. 30-08-2001.

Assistance to individual exporters would be made available by way of reimbursement of to & fro air fare within permissible limits. Registered MSME units seeking such assistance may approach the Office of DC(MSME) through FIEO/EPCs/MSME associations. Other parameters such as eligibility for assistance, activities eligible for financing, permissible funding limits and other conditions are indicated below.

1. Exporters eligible for assistance:
   
   
   1. Exporting unit must be registered as MSME / SSSBE.
   2. Exporting unit must be a member of FIEO / EPC.
   3. Exporting units with aggregate exports of Rs. 2 crores and above over the last three financial years (Rs. 1 crore for ISO 9000 certified exporters) are eligible for assistance from the Ministry of Commerce through EPCs/other grantee organisations. MSME units with aggregate exports less than this limit would now be eligible for direct assistance from the Office of DC (MSME) under this scheme. MSME units, which have not yet commenced exports, are not eligible for assistance.
   4. An exporting unit would be eligible for assistance under MSME-MDA only once in a financial year.


2. Activities eligible for financing:
   
   
   1. Individual participation in overseas fairs/exhibitions.
   2. Individual overseas study tours/as member of a trade delegation going abroad.
   3. Publicity overseas.


3. Permissible funding limits:
   
   
   1. 90% of cost of return, ticket by economy class subject to an upper ceiling of Rs.60,000/- (Rs.90,000/- for Latin American countries). In case excursion fare is cheaper than economy class fare, the excursion fare will be considered.
   2. 25% of the cost of production of publicity material limited to Rs.15,000/- in a financial year.


4. Other conditions:
   
   
   1. Assistance shall be available for travel by one permanent employee/director/partner/proprietor of the MSME unit in economy class by Air India. Air travel by airlines other than Air India would be permissible provided that their economy class airfare is not higher than Air India.
   2. Applications (Form-I) must reach the Office of the DC(MSME) at least one month before the start of the event in question.
   3. The MSME unit should not have been charged/prosecuted/debarred/ blacklisted under the export and import policy or any other law relating to export and import business.
   4. Total MDA assistance under MSME-MDA scheme shall be inclusive of MDA assistance received from all Government Bodies/FIEO/EPCs/Commodity Boards/Grantee Organisations etc.


5. For publicity, advertisement etc.
   
   
   1. Application for assistance (Form-IV) must reach the Office of DC(MSME) at least one month before the date of printing of publicity material, along with a dummy copy of the proposed publicity material.
   2. If printing is involved, quotations from at least three printers are to be obtained. The grant will, however, be allowed against the lowest quotation only, subject to the overall ceiling specified earlier. Printing must be done domestically.
   3. The MSME unit should not have been charged/prosecuted/debarred/ blacklisted under the Export and Import policy or any other law relating to export and import business.
   4. Total MDA assistance under MSME-MDA for this activity shall be inclusive of MDA assistance received from all Government Bodies/EPCs/ Commodity Boards/Authorities etc. for publicity abroad in a financial year.


6. Procedure for availing assistance:
   
   
   1. As mentioned above, the application for assistance must reach the Office of DC(MSME) at least one month in advance. The application must be accompanied by:
      
      
      1. Copy of MSME registration issued by concerned GM(DIC)/Director of Industries.
      2. Evidence of membership of FIEO/EPC.
      3. CA's certificate in respect of FOB value of aggregate exports of last 3 years.
      4. Certificate from the FIEO/concerned EPC that the unit in question is not availing MDA grant from FIEO/EPC for the event/activity in question.
   
   
   2. Applications received within the prescribed time period shall be considered by the MSME-MDA Committee. If the case is approved, an in-principle letter would be issued to the exporting unit.
   3. On completion of the event, the exporting unit must submit a claim for payment in the prescribed form (Form-II), enclosing the following:
      
      
      1. Pre-receipt (Form-III).
         
         
         1. Photocopy of passport indicating therein entries regarding departure from and arrival in India and also the country/countries visited.
         2. Original air ticket used during the journey. In case original air ticket is lost, a photocopy of the same, along with a certificate indicating details of travel from the concerned airline, may be furnished.
         3. Report on participation and business generated, including confirmed orders obtained etc.
   4. Claim form must be submitted within three months of return to India on completion of activity.

   In respect of claims regarding publicity (Form-V), a copy of the publication must be submitted along with bill for payment and pre-receipt. In addition, a copy of the payment receipt from the vendor/publishing agency must also be furnished.

   A checklist of documents required to be submitted in each case may be seen at Annexure

   MSME-MDA COMMITTEE

   SECTOR-SPECIFIC MARKET STUDIES
   
   Financial assistance for the conduct of market studies would be available for industry associations/EPCs/FIEO. These should be sector specific and in respect of those sectors where MSMEs have a significant presence. This will include studies commissioned by industry associations to assess impact of WTO agreements on a specific sector. The Office of DC(MSME) may also commission such studies independently under this scheme. Assistance for commissioned studies would be limited to an overall ceiling of Rs.2 lakhs per study.

   ANTI-DUMPING CASES
   
   With the opening up of the economy, the use of unfair trade practices has come into sharper focus. Establishing the use of unfair trade practices such as dumping requires much groundwork. Assistance for initiating/contesting anti-dumping cases will therefore be made available to MSME associations. Such assistance would be limited to 50% of total costs involved or Rs. 1 lakh whichever is lower.
   
   Proposals in respect of market assistance/sector studies and for anti-dumping cases must be self-contained and should include details of activities proposed to be undertaken, breakup of costs in respect of each activity, bio-data of professionals proposed to be engaged and duration of time required for completion.
   
   BAR CODE
   
   75% reimbursement to MSME unit for adoption of Bar Code.
   
   IMPLEMENTATION OF THE SCHEME
   
   The scheme shall be implemented by the Export Promotion and Marketing Division of the Office of DC(MSME). Application forms are enclosed with these guidelines and are also available at SIDO's website at www.smallindustryindia.com. At the start of each financial year, the Office of DC(MSME) shall hold a joint meeting with NSIC, SIDBI and the Ministry of Commerce to ensure that no duplication of funding or overlap occurs in the implementation of the scheme. The MSME MDA Committee shall also identify thrust commodities and thrust regions to be focussed on during the year.
   
   

   MSME-MDA COMMITTEE

   Applications received in respect of each fair/event will be placed before the MSME - MDA Committee which shall meet at least a week to ten days before the start of the fair/event. The Committee shall be headed by the Development Commissioner (MSME) and shall include as its other members a representative from FIEO, a representative from the IF Wing attached to the Ministry of MSME&ARI, Director (Board & Policy) JDC (WTO) and JDC (EP&M)in the Office of the DC(MSME) and the Director (WTO) in the Office of the DC(MSME). The Director (EP&M) in the Office of the DC(MSME) shall be the Member Secretary.

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   ANNEXURE

   Check list of documents to be enclosed with application form and claim form

   FORM-I Application form for participation in fair/study tours/trade Delegation

   • Copy of MSME registration certificate.
   • Proof of FIEO/EPC membership.
   • CA's certificate for FOB exports over last 3 years.
   • A certificate/communication from concerned EPC/FIEO that the MSME unit will not be availing any assistance for this activity from the EPC/FIEO.
   • Literature on the fair/event (if available).

   FORM-II Claim form for participation in fair/study tour

   • Pre-receipt (Form-III).
   • Photocopy of passport showing departure from India and return to India, visa, country/countries visited.
   • Original air ticket.
   • Report on participation etc.

   FORM-III Pre-Receipt

   FORM-IV Application form for assistance for publicity

   • Copy of MSME registration certificate.
   • Proof of FIEO/EPC membership.
   • CA's certificate for FOB exports over last 3 years.
   • A certificate/communication from concerned EPC/FIEO that the MSME unit will not be availing any assistance for this activity from the EPC/FIEO.
   • Dummy copy of publicity material.
   • Quotations from 3 printers.

   FORM-V Claim form for publicity

   • Pre-receipt (Form-III)
   • Actual copy of publicity material.
   • Copy of payment voucher/receipt from vendor/printer.

   Application form for reimbursement of one time registration fee for adoption of bar code from GS1 India.

   • Form-VI
   • Annexure I, II, III and IV
   
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