SME sector optimistic over export potential

Exports from small and medium enterprises (SMEs) are growing despite rising cost of raw material and international competition

Exports from the Micro Small and Medium Enterprises (MSMEs) are increasing, despite high raw material costs, difficult global markets and stiff international competition.

According to a survey conducted by the Confederation of Indian Industry (CII), 42% of exporters recorded a rise in volumes during the first half of FY10 while about 50% exporters saw an increase in volumes in the second half. It said that around 56% exporters expect an increase in exports in dollar terms while 42% foresee a decline.

The survey revealed that rising cost of raw material, international competition, price competitiveness and delay in payments are the key impediments limiting the growth of exports.

The top five regions for exports by Indian MSMEs are Europe, North America, South-east Asia, the Middle-east and the Far-east. A majority of them anticipate that Europe and North America are the markets with most potential for their exports.

A recent Associated Chambers of Commerce and Industry of India (ASSOCHAM) study said that SMEs are expected to contribute 22% to India's GDP by 2012, up from about 17% currently.

The Indian government has recently announced that it would raise Rs1,000 crore for developing MSMEs under the 11th five-year plan.

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