Agra, July 29 (KNN) Small and Medium Enterprises (SMEs) in BRICS countries will have to make serious efforts to join Global Value Chains (GVCs) through which 80% of world trade is being routed now.

During the 2^nd BRICS MSME Roundtable being held in Agra (India), there was a consensus among representatives of Brazil, Russia, India, China and South Africa that SMEs were essential for equitable and in inclusive economic growth in their respective countries. But a concern that MSMEs were ill equipped to link the GVCs was also widely shared. 

The Roundtable was inaugurated by Additional Secretary and Development Commissioner (MSME) S.N. Tripathi and moderated by Joint Secretary, Department of Commerce, Ministry of Commerce and Industries  Damu Ravi.

According to Secretary General of Federation of Indian Micro and Small & Medium Enterprises (FISME), Anil Bhardwaj, “With the exception of China in Manufacturing and India in Services, none of the BRICS countries has significant share in the GVCs”.

Citing a number of studies on GVCs including one on BRICS by Fudan University (China) he presented a series of measures that BRICS countries may be required to take to link MSMEs to the GVCs.

Presenting a matrix of differences between the classical trade and trade in the GVCs he highlighted that in the GVC era how the traditional model of export promotion had become redundant and Governments would have to work on war footing towards reducing cost of imports of equipment, parts, components and services to make exports competitive

“A country with higher costs of Customs clearance and logistics  is set to lose out in race to join the production networks in 21st century”,  Bhardwaj mentioned.

The delegates from Brazil, Russia, South Africa and China also echoed the sentiments and emphasized the need to collectively work through BRICS platform for trade facilitation for SMEs and to seek special for MSMEs dispensation in multilateral trade agreements.

The MSME Round table was organized a part of series of meetings being held as precursor to the 8th BRICS summit which is scheduled to be held during Oct 15-16 2016 in Goa under Chairmanship of India. (KNN Bureau)