MSME ministry plans to amend Coir Industry Act, 1953 to modernize infrastructure and reduce compliance burden | Today’s news

New Delhi: The government is considering amending a 1953 law governing its coir industry to update the rules for an industry that employs more than 750,000 people and exports a record ₹There were 6,614 million products last fiscal year, according to two people familiar with the matter.

The micro, small and medium enterprises (MSME) ministry wants to expand the law’s definitions to cover a wider range of products and reduce delays and paperwork faced by firms, the people said. Deliveries increased by 52%. ₹6,614 crore in FY26 from ₹4,343 crore in FY25.

“Working on some additions to The Coconut Industry Act began. There have been some discussions about it and the broad thrust of this exercise is modernization and rationalization,” said one of the people, a government official who requested anonymity.

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The industry is concentrated in southern India and about 80% of the workers in fiber extraction and spinning are women.

The amendment would also re-examine existing definitions under the law to bring the terms up to date, the former said.

Queries emailed to the MSME Ministry and Coir Board on November 5 remained unanswered.

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Indian coir products such as mats, pots, coir fibers and handicrafts have found key export markets such as the US, China, Netherlands and Spain among others, according to the Ministry of MSME’s annual report for FY26, as these products are commonly biodegradable.

Industry support

Experts say coir, a natural fiber, can be an alternative to synthetic fibers.

“It has the potential to command a high premium in replacing products using synthetic fibers such as mattresses. Similarly, coir ropes have an advantage over synthetic ropes as they hold their knots more securely than plastic knots, which come loose easily,” said Gurudas Nulkar, professor and director of the Center for Sustainable Development at the Gokhale Institute of Politics and Economics.

Nulkar said that apart from coir, coconut shells are also a good industrial substitute. “Coconut shells are used to activate carbon, which is a key component of home water filtration systems. Another future use is that they can be converted into biochar, which is eligible for carbon credits,” he said.

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While exports are growing, it is important to understand that export profits mostly benefit traders, but putting more money in the hands of coconut farmers and workers is essential to building a local market for coconut products, Nulkar added.

Lobby groups say the sector would gain by covering newer coir products and making compliance easier.

Vinod Kumar, president of the India SME Forum, which represents nearly 100,000 SMEs, said the law should “explicitly recognize a range of commercially relevant products from coconut husks, including coconut pulp, coir, flakes, growing media, geotextiles and composites”. Reform must go beyond adding names, he said, by “removing ambiguity around newer materials and applications and ensuring eligible businesses have access to support development.”

“Compliance should be simplified through a single digital interface and less resubmission,” he said. Modernization also needs shared processing, drying, sorting, testing and water treatment facilities, plus husk storage, available working capital and stronger links between buyers, he added.

Disruption to exports is also hurting artisans, Kumar said, referring to the build-up of products ready for export in March 2026. ₹200 million crowns. “Even an artisan who never exports directly can be affected when an overseas buyer delays an order,” he said.

Key things

• Coir exports jumped 52% to a record ₹ 6,614 crore in FY26.
  
• The Center is considering changes to product definitions under the Coconut Act, 1953.
  
• Coir employs 753,886 people; women make up about 80% of the spinning workers.