SME Exports on the rise : CII MSME Outlook Survey on Exports

Exports from the MSMEs are on the rise, inspite of the rising cost of raw materials, difficult global market and stiff international competition, according to the MSME outlook survey on Exports, conducted by the Confederation of Indian Industry (CII).

The CII MSME Outlook Survey on Exports was undertaken to analyse the actual export performance of the MSMEs during the first half (H1) of the year 2009-2010, understand the future export prospects/plans during the second half (H2) of the year 2009-2010, besides identifying key factors that are limiting exports, and the emerging export markets for the Indian MSMEs.

The principal findings of the survey are based on responses from a broad spectrum of industry groups and activities of the Micro, Small and Medium industry members of CII all over the country .

Volume of Exports

According to the CII MSME Outlook Survey on Exports, 42 % of respondents registered an increase in volume of their exports over the past six months , for the 9 % of the respondents there was no change in volume of their exports while 49 % respondents registered a decline in volume of their exports.

In next six months ( i.e October 2009 - March 2010), 50 percent of surveyed respondents expect an increase in volume of their exports, for 15 percent of respondents expect that there will be no change in volume of their exports, while 35 percent respondents expect that their volume of exports would decline.

Growth of Exports :

According to survey findings, 56 percent respondents expect an increase in growth of exports for their company in $ terms, 42 % respondents expect that their export growth rate would decline while only 2 percent respondents have not responded to this question.

Out of these ( 56 %), 26 % of the respondents expect rate of export growth for their company to be between 0-10% in $ terms , 20 percent respondents expect the export growth rate between 10-20% and only 10 percent of respondents expect export growth rate more than 20 % for their company.

Limiting Factors for Export Growth :

Key limiting factors for the export orders over the next six months of the Micro, Small and Medium enterprises, as revealed by the CII MSME survey are rising cost of raw material, international competition, price competitiveness and delay in payments.

Present and Potential Export Market for Indian MSMEs :

According to MSME survey, top five regions for the exports by Indian MSME are Europe, North Americas, South East Asia, Middle East Asia and Far East Asia. A majority surveyed respondents foresee that Europe and North Americas are the growing market for their exports.

Benefit of Interest Rate Subvention for Indian MSMEs :

According to Survey, 40 percent of respondents have not availed the benefit of the interest rate subvention, proposed by Reserve bank of India (RBI) as per the economic stimulus package for the SMEs, 36 percent of respondents have availed the benefits as per the stimulus package proposed by RBI , while 24 respondents were not aware of this benefit.

According to Mr Salil Singhal, Chairman, CII National MSME Council the growth in MSME exports is a positive shift and may be attributed to the "Trickle down affect" of the various measures announced as part of the stimulus packages announced by the Government of India & the Reserve Bank of India, during the December 2008 & January 2009. He added that, it is infact a moment of triumph for the Indian MSMEs as they have overcome a challenging, yet a successful year and prepare themselves for more vibrant & dynamic future.

CII had earlier submitted a Development Agenda for the Indian MSMEs, to Dr Manmohan Singh, Hon'ble Prime Minister of India, that was followed by the constitution of a High Level Task Force force, under the Principal Secretary, in the Prime Minister's Office (PMO), to look into the issues being faced by the MSMEs.