MSME exporters need significant fiscal stimulus to become competitive
Updated: Jun 18, 2015 05:10:06pm
New Delhi, June 18 (KNN) Falling global demand and persistent domestic bottlenecks have ensured a sixth straight monthly fall in India's exports, in May. India's exports dipped by 20.19 per cent in May to USD 22.34 billion, mainly due to dip in crude oil prices that impacted export realisation from petroleum products.
However, experts opine that the problem is deep rooted and moribund export by Asia’s major economies—China, India, South Korea, Thailand and Indonesia are a cause of concern. Countries, including India, have cut interest rates this year to help foster domestic growth but without much success.
Samiran Chakraborty, Chief economist at Standard Chartered, attributed the export fall to weak global growth and an overvalued rupee. Though the rupee has weakened a little in recent months, it will take a while for it to reflect in export numbers, he added.
Decline in exports of Engineering Goods, Gems & Jewellery, Organic & Inorganic chemicals, Drugs & Pharmaceuticals, Leather & Leather Products, Electronic Goods and Plastics & Linoleum are of concern as these sectors have either shown further decline or have further moved into negative territory.
Commenting on the immediate corrective measures needed to be initiated by the Government, S C Ralhan, President, Federation of Indian Export Organisations (FIEO) said that the Interest Subvention Scheme may be re-introduced immediately and liquidity crunch of the exporters in the form of refunds may be addressed with timely release of the exports benefits. Also need of the hour is the immediate Introduction of Export Development Fund for aggressive marketing. He also said that Indian exporters are also losing out their competitiveness due to high logistics cost and ground level transaction costs.
D S Rawat, Secretary General of ASSOCHAM, opined that the Commerce and Finance Ministries should jointly devise a strategy to deal with the difficult situation which would eventually affect the country's overall balance of payments.
“MSMEs are the most dynamic exporters of India may be a game changer in export performance, if adequate supports are available” , reacted Dr Sangam Kurade, President of Federation of Indian Micro and Small & Medium Enterprises (FISME).
He also mentioned that MSME’s share in overall exports from India is about 50 per cent and to overcome the present sluggishness in the traditional markets, they need to explore new markets. Challenges here are risk of unknown buyers and sunk costs in market study etc.
“This needs adequate Government support”, Kurade mentioned.
He also informed that sometime back FISME submitted a proposal to Government for financial assistance to Associations and Federations of MSMEs to set up offices in new and emerging export destinations to provide marketing support to MSMEs.
“Government need to develop such innovative tools to support MSMEs”, he said.
“Fall in exports is becoming a trend and it is really worrying," said Anupam Shah, chairman of the Engineering Exporters' body, EEPC India adding that, "Indian exporters need significant fiscal stimulus to become competitive." (KNN/ DB)
However, experts opine that the problem is deep rooted and moribund export by Asia’s major economies—China, India, South Korea, Thailand and Indonesia are a cause of concern. Countries, including India, have cut interest rates this year to help foster domestic growth but without much success.
Samiran Chakraborty, Chief economist at Standard Chartered, attributed the export fall to weak global growth and an overvalued rupee. Though the rupee has weakened a little in recent months, it will take a while for it to reflect in export numbers, he added.
Decline in exports of Engineering Goods, Gems & Jewellery, Organic & Inorganic chemicals, Drugs & Pharmaceuticals, Leather & Leather Products, Electronic Goods and Plastics & Linoleum are of concern as these sectors have either shown further decline or have further moved into negative territory.
Commenting on the immediate corrective measures needed to be initiated by the Government, S C Ralhan, President, Federation of Indian Export Organisations (FIEO) said that the Interest Subvention Scheme may be re-introduced immediately and liquidity crunch of the exporters in the form of refunds may be addressed with timely release of the exports benefits. Also need of the hour is the immediate Introduction of Export Development Fund for aggressive marketing. He also said that Indian exporters are also losing out their competitiveness due to high logistics cost and ground level transaction costs.
D S Rawat, Secretary General of ASSOCHAM, opined that the Commerce and Finance Ministries should jointly devise a strategy to deal with the difficult situation which would eventually affect the country's overall balance of payments.
“MSMEs are the most dynamic exporters of India may be a game changer in export performance, if adequate supports are available” , reacted Dr Sangam Kurade, President of Federation of Indian Micro and Small & Medium Enterprises (FISME).
He also mentioned that MSME’s share in overall exports from India is about 50 per cent and to overcome the present sluggishness in the traditional markets, they need to explore new markets. Challenges here are risk of unknown buyers and sunk costs in market study etc.
“This needs adequate Government support”, Kurade mentioned.
He also informed that sometime back FISME submitted a proposal to Government for financial assistance to Associations and Federations of MSMEs to set up offices in new and emerging export destinations to provide marketing support to MSMEs.
“Government need to develop such innovative tools to support MSMEs”, he said.
“Fall in exports is becoming a trend and it is really worrying," said Anupam Shah, chairman of the Engineering Exporters' body, EEPC India adding that, "Indian exporters need significant fiscal stimulus to become competitive." (KNN/ DB)
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