ESI in the Trading Industry: Does It Apply to Our India-Based Operations?

Is ESI applicable to the trading industry?

My parent company is a manufacturing company of automotive parts in Japan. In India, we are involved in trading imported materials.

Kindly advise, is ESI applicable to our organization?

Dear Seniors, Regarding the ongoing query from Ms. Lavenya, we are also involved in the trading business. Is ESIC applicable to a trading business firm that is registered under the Shop and Establishment Act? Kindly provide your valuable suggestions and reply to the same. If possible, please contact me via the cell number mentioned below. I require a prompt response.

Thank you,

Balvant Dodiya

[Phone Number Removed For Privacy Reasons]

Understanding ESI Applicability for Trading Business Firms

Trading business firms are generally referred to as "shops" and are covered under the ESI Act, 1948, specifically under section 1(5) of the said Act and the rules and regulations framed thereunder.

Before initiating the process of obtaining a Code Number under the aforementioned Act, it is advisable to verify whether the appropriate government has extended the provisions of the Act as per the above-mentioned provisions. This information can be confirmed at the nearest ESIC Branch Office or Regional/Sub/Div/Office.

Currently, most state governments have reduced the threshold for coverage of such "shops" to 10 or more persons. However, in certain states like Maharashtra, this threshold may be 20 or more persons.

Additionally, it is recommended to verify whether the area where your "shop" is situated falls under the implemented area as per section 1(3) of the Act before obtaining the code number from ESIC.

Thank you.