Promoting the Export of SMEs and MSME Products in the International Market
Imagine a world where 90% of all enterprises are small, medium-sized, or micro businesses!
That's the reality in India, where the SME (small and medium enterprises) and MSME (micro, small, and medium enterprises) sector is a vital part of the country's economic development.
contribute to industrial production, exports, and employment in a big way.
What are SMEs and MSMEs in India?
· According to the Ministry of Micro, Small and Medium Enterprises, SMEs are businesses that have a maximum investment of INR 100 million (about $1.4 million) in plant and machinery, while MSMEs have a maximum investment of INR 50 million (about $700,000) in plant and machinery.
· These enterprises can be found in a variety of industries, including manufacturing, trading, and service sectors. Some examples include textiles, leather, food processing, gems and jewelry, and engineering.
· They can be found in both urban and rural areas and play a crucial role in the economic development of these regions.
SMEs and MSMEs in India: Contributions to the Economy
In total, there are around 63 million MSMEs in India, which make up around 120 million jobs – that's about 40% of total employment in the country. The SME and MSME sector in India is growing steadily and is expected to continue doing so in the future.
The government has implemented a number of policies and schemes to support and- promote the growth of these enterprises, including the MSME Development Act, the Credit Guarantee Fund Scheme, the National Manufacturing Competitiveness Programme, and the Pradhan Mantri MUDRA Yojana.
SMEs and MSMEs in India's Export Market
In addition to its significant contribution to the domestic economy, the SME and MSME sector in India also plays a vital role in the country's export market.
These enterprises account for a significant share of India's total exports, and they have the potential to further boost the country's export performance in the coming years.
to the Ministry of Commerce and Industry, SMEs accounted for around 45% of India's total exports in the fiscal year 2019-2020. These exports were worth around INR 5.5 trillion (approximately $76 billion), and they were predominantly concentrated in sectors such as engineering, textiles, gems and jewelry, and leather.
The government of India has implemented various initiatives to support and promote the export of SME and MSME products in the international market, including:
- The Market Access Initiative (MAI) Scheme: This scheme provides financial assistance to SMEs for participating in international trade fairs and exhibitions, and it also provides support for the development of marketing material and the promotion of products in the international market.
- The Export Promotion Capital Goods (EPCG) Scheme: This scheme allows SMEs to import capital goods at a reduced rate of duty, which helps them to modernize and upgrade their production facilities and become more competitive in the global market.
- The Trade Related Entrepreneurial Assistance and Development (TREAD) Scheme: This scheme provides technical and financial assistance to SMEs for the development of export-oriented enterprises, and it also helps these enterprises to access credit from banks and financial institutions.
The government's efforts to support and promote the export of SME and MSME products are expected to yield positive results in the coming years.
The sector has the potential to further boost the country's export performance and contribute to the overall growth of the economy.
So, the next time you're in India and you see a small business owner hustling to make ends meet, remember that they're part of a huge and important part of the country's economy.
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