New Delhi, Dec 24 (KNN) Despite a reasonable growth story and substantial share in overall exports, MSMEs are often faced with these challenges that restrict their entry into the foreign market, the Ministry of Micro, Small and Medium Enterprises (MoMSME) said in its Strategy Action Plan on Unlocking the potential of MSME exports.

The report said that “Not only do these challenges need to  be  studied  in  detail  but,  an  eco-system needs to be created in such a way that  these  enterprises  shall  be  able  to  participate  in  the  global  value  chain  on  its  own  and  generate  enough  economies  of  scale.”

The  strategy  action  plan  prepared by the Ministry aims  to create  a  sustainable  ecosystem  for  entire  MSME  development. 

The action plan aims to achieve the objectives of – Finance; Access to affordable trade finance; Target of USD 100 billion of exports from India by 2020; Evaluate readiness of MSMEs to export their products and services; Recognize areas  where  improvements  are  required  in  order  to  be  able  to  export  effectively and efficiently; Integration of MSMEs into Global Value Chain.

To ensure efficient and  effective  delivery  of  all  MSME  export  related  interventions,  the Strategy Action Plan proposed  to  formulate  a  governing  council  that  shall  be  chaired  by  Secretary,  M/o  MSME  and  Co-chaired  by  DC,  M/o  MSME. 

The  council  shall  comprise  of  senior  officials and members   from   M/o   MSME,   Commerce,   MSME Export   Promotion   Councils,   Export  Development Authorities, Commodity Boards, and other bodies.

Highlighting the problems faced by the sector, the Action Plan Report said Limited information about products & services in demand is one of the key problems for the sector.

Working  of  the  foreign  markets,  and  in  particular  difficulties  in  accessing  export  distribution channels and in connecting with overseas customers is another problem stressed upon in the report.

Further, lack  of  awareness  on export  promotion  and  assistance  programmers  offered  by  the  government and unfamiliarity  with  legal  and  regulatory  frameworks  of  the  exporting  and  importing  countries are another issues identified in the Strategy Action Plan.

No  or  zero  awareness  on  IPR  issues  and  various  International  Trade  Agreements  (ITAs) Finance; Access to affordable trade finance; Costly product standards and certification procedures; Logistics cost –airport and shipping costs etc; Technology; Lack   of   innovation,  low value  addition  and  poor  packaging  due  to  low  level  of  technology adoption are some other problems identified.

The MSMEs, according to the report, are unable  to  meet  importer’s  quality  standards  and  establishing  suitable  design  and  image for the export market plus time-consuming  and  cumbersome  documentation  process  required  to  comply  with  foreign and domestic market regulations are major hurdles for the sector.

The Ministry of MSMEs stressed that not only do these challenges need  to  be  studied  in  detail  but,  an  eco-system needs to be created in such a way that  these  enterprises  shall  be  able  to  participate  in  the  global  value  chain  on  its  own  and  generate  enough  economies  of  scale. (KNN Bureau)