New Support Measures In Works For MSME Exporters: Commerce & Industry Minister

New Delhi, Dec 6 (KNN) The government is set to introduce a comprehensive set of measures aimed at bolstering the Micro, Small, and Medium Enterprises (MSMEs) sector by easing financing, reducing operational costs, and boosting export competitiveness. 

Commerce and Industry Minister Piyush Goyal announced on Thursday that the initiatives would include alternative financing models, reserved land in smart industrial townships, and enhanced support from the Export Credit Guarantee Corporation (ECGC).

Highlighting MSMEs’ significant contribution — a third of India’s gross value added (GVA), over 40 per cent of industrial production, and 46 per cent of exports — Goyal reiterated the government’s commitment to addressing their challenges. 

He urged MSMEs to list specific credit-related concerns, particularly issues with collateral demands by banks despite ECGC guarantees.

The ECGC will take a more proactive role to help exporters tackle delays in overseas payments, driven by geopolitical tensions and disrupted shipping routes. 

“Export credit costs remain high, prompting many exporters to rely on banks. We are exploring alternative financing models to mitigate this,” Goyal said at an Assocham event.

In addition, 20 smart industrial townships under the National Industrial Corridor Development Programme will include dedicated zones for MSMEs. 

Twelve locations, such as Agra, Prayagraj, and Dighi Port, have already been approved. These townships, developed through public-private partnerships, aim to create an ecosystem for MSME growth.

Despite these initiatives, challenges persist. Export credit outstanding fell by 5 per cent in March 2024 compared to March 2022, exacerbating exporters’ struggles with rising freight costs and delayed payments. 

Federation of Indian Export Organisations reports a decline in export credit to Rs 2,17,406 crore in Q1 2024 from Rs 2,27,452 crore a year earlier.

To counter these trends, the 2024-25 Budget introduced a credit guarantee scheme allowing collateral-free loans and a new digital cash-flow-based credit assessment model. 

Public sector banks are also set to launch MSME-focused credit products in the coming months, signaling a renewed push to fuel sectoral growth and employment.

The MSME sector, accounting for over 90 per cent of India’s industrial enterprises, remains a pivotal driver of the nation’s economic resilience and global trade footprint.

(KNN Bureau)