In its strategy plan on boosting Micro, Small and Medium Enterprises (MSME) exports, the MSME Ministry said that these businesses face difficult challenges that hinder their entry into the foreign market. This is despite a substantial growth and share in overall exports, according to media reports.
The plan proposed the formulation of a governing council to address challenges, and ensure efficient and effective delivery of MSME export-related interventions. The report added, “Not only do these challenges need to be studied in detail but, an ecosystem also needs to be created in a way that these enterprises shall be able to participate in the global value chain on their own and generate enough economies of scale.’
The council will comprise senior officials and members from the MSME Ministry, Commerce Ministry, MSME Export Promotion Councils, Export Development Authorities, Commodity Boards, and more.
The action plan aims to address financial issues, provide access to affordable trade finance, a target of $100 billion of exports from India by 2020, evaluate the readiness of MSMEs to export products and services, recognise areas of improvements and integrate MSMEs into the global value chain.
The report said that a lack of information about products and services in demand is one of the key problems for the sector. It also identified challenges like the working of the foreign markets,particular difficulties in accessing export distribution channels and in connecting with overseas customers.
The MSME Ministry’s plan also said that a lack of awareness on export promotion and assistance programmes offered by the government, and unfamiliarity with legal and regulatory frameworks of the exporting and importing countries were compounding the problem.
There is not enough awareness or access to IPR issues and various International Trade Agreements (ITAs), affordable trade finance, cheap product standards and certification procedures, and easy and cheap logistics and technology, according to the plan.
MSMEs are also unable to meet importer’s quality standards and establish suitable designs and image for the export market. Further, documentation is time-consuming and can be cumbersome.