Home   |   Links   |   contact us   |   Message          


u Training Programs
u Upcoming Events
u Central Government Policies
u Right To Information
u MSME Incentive Schemes
u Monthly Expenditure Report
u MPR of EMs & MSEFCs
u MSME Directory
u How To Start MSME Unit
u Cluster Approach
u News
u Tenders
u MSMED Act-2006
   Download E M Form
u ISO Reimbursement Status
u ISO Status at MSME-DI,Agra
u Notifications
u Photo Gallery
u Online forum
u Export Promotion & Marketing
u International Trade Fairs
u National Awards
u Library
u Schemes for Women
u Projects for Entrepreneurs

Search the Web Site:

Search On :

All Words
Any WordsPhrase


About UsInfrastructurePublicationActivitiesSenet


Reservation Policy

Trade Policy
Foreign Direct Investment Approval
NRI Investment Approval
Foreign Investment Regulations
Labour Policies
Policy for Tiny Sector, Village Industries
Development of Backward Areas
Taxation-Excise Duty

Credit Policy
Quality Standard Policy
Pollution Control Measures
Environmental Control
Policy of Reservation


Reservation Policy

Reservation of products for exclusive manufacture in the small scale sector was introduced for the first time in 1967 with the reservation of 47 items. This number increased progressively as under:

February, 1970 - 55
February, 1971 - 128
November, 1971 - 124
February, 1974 - 177
June, 1976 - 180
April, 1978 - 504

After the introduction of National Industrial Classification (NIC) code the list was recast. As a result, the list of reserved items expanded from 504 to 807 in 1978 and was 836 in 1989. Out of this, 39 items were dereserved in four phases viz., 15 items on 3.4.1997, 9 items on 3.2.1999, 1 item on 1.1.2001 and 14 items on 29.6.2001. Subsequently, 51 items were dereserved in May 2002, 75 items in May 2003 and 85 items in October, 2004.

As of October, 2004, 605 items are reserved for exclusive manufacture in the small scale sector.

Reservation affords support to MSMEs against competition from medium/large/ multinational companies. The policy received statutory backing in 1984 under Section 29B of Industries (Development & Regulation) Act, 1951.

Reservation/dereservation is a continuous process. The Advisory Committee on Reservation constituted under the Industries (Development & Regulation) Act, 1951 recommends items to be added and deleted from the reserved list including bringing changes in nomenclature. The Advisory Committee on Reservation consists of the following:-

Secretary (MSME&ARI) . Chairman
Secretary (IP&P) - Member
Secretary (Commerce) - Member
Adviser (VSI), Planning Commission - Member
Additional Secretary & DC(MSME) - Member Secretary

Non-MSME units (i.e. medium/large units including multi-nationals) can manufacture reserved items if they have obtained a carry on business licence or accept an export obligation of 50% of their production.

As only manufacturing of items is reserved, trading in these items is not a violation of the reservation policy