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The Directorate General of Foreign Trade has launched Trade Regulations, Accreditation & Compliance Enablement (TRACE), with immediate effect, under Export Promotion Mission (EPM) to facilitate MSMEs, involved in international value chains, to meet importing-country regulatory requirements.
This government initiative seeks to strengthen India’s quality and technical compliance ecosystem. This initiative is to provide support to MSMEs to meet internationally recognised quality, safety, and technical requirements arising from compliance and quality related certificates and other mandatory or voluntary conformity-assessment requirements applicable in overseas markets.
Support under TRACE shall be limited to partial reimbursement of eligible expenditure incurred by MSMEs, involved in international value chains. The partial reimbursement is applicable towards testing, inspection, certification, audits, traceability systems. This is also applicable to other conformity-assessment requirements that are mandated vide regulations required for market access, or necessary to demonstrate compliance with internationally recognised standards.
According to the DGFT, the intervention shall be operationalised on a pilot basis for feedback, institutional learning, and data-driven refinements. Stakeholders may submit comments and suggestions on the Guidelines within 30 days through email at epm-dgft@gov.in.
Assistance under this initiative shall be directed towards enhancing the capacity of eligible MSME to demonstrate conformity with applicable standards, upgrade product quality, and comply with legitimate regulatory requirements of importing countries, without conferring any entitlement linked to export performance.
All MSMEs involved in international value chains holding an active Importer– Exporter Code (IEC) (not listed in the Denied Entity List), and a valid MSME Udyam Registration Number shall be eligible for support under TRACE.
Support under this intervention shall be available for partial reimbursement of eligible expenditure incurred towards the following categories of costs mentioned below, subject to the certifications, inspections, and conformity-assessment requirements being included in the positive lists notified under the relevant Annexures.
One-time costs, being certification-related prerequisites essential for market access, including inspections, audits, factory or facility assessments and market-specific licensing requirements. Recurring costs, being costs associated with ongoing export compliance, including certifications arising from quality and compliance related issues, specific health or safety certificates, and buyer mandated voluntary certifications.
The Positive List and Priority Positive List of such testing, inspections, certifications etc. shall be dynamic and shall be periodically reviewed for inclusion or exclusion of certifications based on stakeholder consultations, monitoring of international standards notifications, and trade facilitation considerations.
The level of assistance shall be uniform across all MSMEs (involved in international value chains), irrespective of classification as micro, small, or medium enterprises. The maximum cumulative reimbursement admissible shall be 25 lakh per IEC per financial year.
Reimbursement rates shall be as follows:
Positive List: Up to 60% of the actual cost net of taxes, duties, cess etc or notified ceiling, whichever is lower.
Priority Positive List (Annexure-VI): Up to 75% of the cost net of taxes, duties, cess etc or notified ceiling, whichever is lower. Merchant MSMEs (involved in international value chains) shall be eligible for support under TRACE only in respect of tariff lines notified, where exports are predominantly undertaken through aggregator-based models.
Given Support shall not be admissible in respect of deemed exports, as defined under Chapter 7 of the Foreign Trade Policy or for exports to Special Economic Zones (SEZ). Revised reimbursement rates, as notified from time to time, shall be applicable only to testing and inspection certifications obtained on or after the date of such notification.
Reimbursement shall be admissible after the MSME has cleared and obtained the required testing, certification, or inspection outcome, and not merely upon completion of the process.
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