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In India, the present policy of encouraging growth of small scale industries is based on several promotional measures, one of which is reservation of products for exclusive manufacture in the small scale sector. Large/Medium units can, however, manufacture such reserved items provided they undertake to export 50% or more of their production. The reason for special emphasis on this sector is that it plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy. The opportunities in the small-scale sector are enormous due to the following factors:-
  • Less Capital Intensive
  • Extensive Promotion & Support by Government
  • Reservation for Exclusive Manufacture by small scale sector
  • Funding - Finance & Subsidies
  • Machinery Procurement
  • Raw Material Procurement
  • Manpower Training
  • Technical & Managerial skills
  • Tooling & Testing support
  • Reservation for Exclusive Purchase by Government
  • Export Promotion
  • Growth in demand in the domestic market size due to overall economic growth
  • Increasing Export Potential for Indian products
  • Growth in Requirements for ancillary units due to the increase in number of greenfield units coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification

Criteria For Reservation

Reservation of items for exclusive manufacture in SSI sector is statutorily provided for in the Industries (Development and Regulation) Act, 1951. The issue of reservation/de-reservation of product is examined on a continual basis by an Advisory Committee on Reservation constituted under the Act, which is presently headed by the Secretary (SSI) as Chairman. The Reservation Policy has two objectives:-

  • Ensure increased production of consumer goods in the small scale sector.
  • Expand employment opportunities through setting up of small scale industries.

The overwhelming consideration for reservation of an item is its suitability and feasibility for being made in the small scale sector without compromising the quality aspect. Accordingly:-

List of Items Reserved for Exclusive Manufacture in Micro and Small Sector (As on Date)

(Please also refer to 'Industry and Services' section)


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