‘Exports from MSMEs on the rise’

Exports from micro, small and medium enterprises (MSMEs) are on the rise, despite increase in cost of raw materials, difficult global market and stiff international competition, according to the MSME outlook survey on exports conducted by the Confederation of Indian Industry (CII).

The survey was undertaken to analyse the actual export performance of the MSMEs in the first half of 2009-10, understand the future export prospects and plan for the second-half of the year, besides identifying key factors that are limiting exports and the emerging export markets for the sector. The principal findings are based on responses from a broad spectrum of industry groups and activities of the micro, small and medium industry representatives.

According to the survey, 42 per cent of respondents registered an increase in volume of their exports over the past six months. For 9 per cent of the respondents there was no change in volume of their exports while 49 per cent respondents registered a decline in volume of their exports. During the next six months (October-March 2009-10), 50 per cent of respondents expect an increase in volume of their exports, 15 per cent expect that there will be no change in volume of their exports, while 35 per cent expect that their volume of exports would decline.

According to the survey, 56 per cent respondents expect an increase in growth of exports for their company in dollar terms, 42 per cent expect that their export growth rate would decline while only 2 per cent respondents have not responded to this question.

Out of these (56 per cent), 26 per cent of the respondents expect the rate of export growth for their company to be between 0 per cent and 10 per cent in dollar terms, 20 per cent respondents expect 10-20 per cent growth and only 10 per cent of respondents expect export growth rate more than 20 per cent.

According to the survey, top five regions for exports by Indian MSME are Europe, North America, Southeast Asia, Middle East Asia and Far East Asia. A majority surveyed respondents foresee that Europe and North America are the growing markets for their exports.

Salil Singhal, Chairman, CII National MSME Council, said the growth in MSME exports was a positive shift and might be attributed to the trickle down effect of the various measures taken as part of the stimulus packages announced by the government and the Reserve Bank of India in December 2008 and January 2009.