India Cracks Down on Irregular Goods Transshipment

In a significant policy statement, Commerce and Industry Minister Piyush Goyal announced that India will not allow the transshipment of goods that violate rules of origin and other trade norms. The announcement, made at a recent steel industry event in Mumbai, highlights the government's broader commitment to protecting domestic industries, including the vital MSME sector.

Goyal emphasized that India would not serve as a conduit for third countries attempting to bypass international trade rules. He noted that certain countries often bring minimal processing into India before re-exporting goods to other destinations under the guise of “Made in India” products. This, he said, undermines fair trade principles and harms Indian manufacturers. The minister’s statement has particular relevance for Indian MSMEs. Often operating with limited resources and facing intense competition, MSMEs are vulnerable to market distortions caused by dumping and irregular import practices. When low-cost or unfairly subsidized goods enter the Indian market, domestic producers—especially smaller businesses—struggle to compete, leading to potential job losses, lower income levels, and stunted growth.

To address such risks, the government has already implemented safeguard duties, such as the 12% duty imposed on steel imports for 200 days, aimed at protecting domestic industries from unfair competition. These measures, he said, are essential not only for large sectors like steel but also for sustaining the broader industrial base that includes thousands of MSMEs. Furthermore, he encouraged Indian industries to prioritize sourcing from domestic suppliers over convenient imports. He urged companies to support local manufacturers, stating, “wherever you see an Indian supply, you will give preference and not conveniently import your requirements to the detriment of some other Indian company or manufacturer.”

In the context of MSMEs, this approach aligns with the broader “Make in India” and “AtmaNirbhar Bharat” initiatives, which aim to strengthen local value chains, increase self-reliance, and expand the contribution of MSMEs to the national economy. Greater preference for domestic sourcing could provide MSMEs with more business opportunities, enhance capacity utilization, and stimulate innovation.

On the international front, the minister also highlighted India’s efforts to secure greater market access through Free Trade Agreements (FTAs), which, if effectively negotiated, could open up new export opportunities for MSMEs while maintaining protections against unfair trade practices. For MSMEs, these developments present both opportunities and challenges. While domestic preference policies and anti-dumping measures can provide immediate relief from unfair competition, adapting to higher quality and compliance standards will be essential for long-term success. MSMEs will need to invest in technology, improve production efficiency, and build stronger linkages with larger industries to fully benefit from the evolving trade ecosystem.

In conclusion, the Indian government’s firm stance against irregular transshipment and dumping reflects a commitment to building a fair and competitive market environment. For MSMEs, this could mean better protection, increased opportunities, and a clearer path toward sustainable growth—provided they are prepared to rise to the occasion.