MSME units, especially labour-intensive sectors showing modest growth or are into negative territory: FIEO

New Delhi, June 16 (KNN) The Federation of Indian Export Organization (FIEO) has said that the MSME units, especially in the labour-intensive sectors, are either showing very modest growth or are into negative territory.

Responding to May 2018 trade data, Ganesh Kumar Gupta, FIEO President, said that the exports data for the second month of the fiscal though have shown a robust growth but MSME units particularly in labour-intensive sectors such as gems & jewellery, leather & leather products, RMG of all textiles, jute manufacturing including floor covering, carpets, handicrafts, agri products and many other sector of exports are either showing very modest growth or are into negative territory.

These sectors are still facing the liquidity crunch as banks and lending agencies have continuously been tightening their lending norms, as reflected in sharp reduction in exports credit, which does not augur well for their exports.

Gupta, however, said that a lot of cushioning this time around has been provided by the petroleum sector to exports, as it not only outperformed but had an over impressive growth of about 105%.

FIEO raised concern on the rising trade deficit, primarily on account of swelling of crude imports bill due to rising global oil prices, which would further add to inflationary conditions and also on the current account deficit front.

Gupta said that domestic issues including access to credit, cost of credit especially for MSMEs should be seriously looked into as global challenges and increasing protectionism, has also added to the woes of the exporters.