Products that are exported by SMEs in India and in which small-scale industries (SSI) generally have the bulk of the share, are garments, engineering goods, chemicals, pharmaceuticals, leather, plastic products, processed food, gems and jewelery. Also, 95 percent of the products exported by the SSI are non traditional products.
However, there is no exclusive data available for medium enterprises regarding exports, but a study by the Exim Bank reveals that both traditional and non-traditional goods constitute exports of medium-sized enterprises, and sectors like food and beverages, chemicals, auto-components, machinery, electronics, metals, castings and forgings have witnessed an increasing export orientation trend over the last decade.
Potential export destinations for products of SMEs are the USA, EU and Japan. There exists a huge potential in the non-traditional sectors. They may not be able to tap the advantages of economies of scale, but then they are ideal for catering to small markets and orders. These activities are often ecofriendly, which can be an added advantage. It has been identified that the US could provide a market for textiles, leather items and engineering/electrical and electronic items. Japan is a potential market for exporting chemicals, and agricultural, marine and allied products. The European Union can be tapped for enhancing SSI exports of engineering/electrical, textiles, and electronic items. Also, the a number of markets could be accessed for various goods in which given states have the bulk of market share or are suitable for those products.
| who is an SME? | ||
| Classification | Investment ceiling for plant, machinery, or equipment | |
| Manufacturing enterprises | Service enterprises | |
| Small | More than Rs. 25 lakh and less than Rs. 5 crore | More than Rs 10 lakh and less than Rs 2 crore |
| Medium | More than Rs 5 crore and less than Rs 10 crore | More than Rs 2 crore and less than Rs 5 crore |
Organizations dealing with SMEs
Small Industries Development Bank of India (SIDBI) is the prime institution for financing, promoting, and developing these industries. Their main function is to provide finance and refinance assistance and development services to these industries. The State Financial Corporations (SFCs) and State Industrial Development Corporations (SIDCs) provide long-term finance assistance at the state level. The National Small Industries Corporation (NSIC) provides support in getting performance and credit ratings and 75 percent of the fees charged by rating agencies may be reimbursed under the scheme implemented by them. The Indian Institute of Entrepreneurship (IIE) and various other institutes provide assistance in developing skills and imparting training.
Government assistance
To increase exports of SMEs, the government provides various incentives and facilities. To avail these, units are required to submit details of their investment and turnover. Incentives and facilities include credit facilities, fiscal support, cluster-based development, technology, infrastructure, and marketing support. Some special export incentives and facilities are also provided. Products of small-scale industries are displayed in international exhibitions, the cost for which is borne by the government. Various training programs regarding packaging, marketing, etc. are conducted to help entrepreneurs. Also, assistance is provided to individuals for participating in overseas fairs, exhibitions, study programs, etc.
| Export Destination of SSI Products | ||
| Product group | Main destination (countries) | States producing these products |
| Readymade garments | USA, Europe, Canada, West Asia and North Africa | Punjab, Haryana, Tamil Nadu and Maharashtra |
| Plastic items | UAE, China, Italy, Saudi Arabia and Oman | Various |
| Marine products | Japan, USA, EU, China and South-East Asia. | Kerala, Tamil Nadu, West Bengal, Maharashtra and all the coastal states |
| Sports goods | UK, USA, Australia, Germany and South Africa | Punjab, Haryana, Tamil Nadu and Maharashtra |
| Spices | East Asia, EU, North African Zone and American Zone | Various |
| Cashew items | USA, Netherlands, UK, Japan and UAE | Maharashtra, Andhra Pradesh, Kerala and Orissa |
| Shellac items | Indonesia, Germany, UAE, USA and Italy | Various |
| Synthetic items (Madeups) | UAE, UK, Turkey, USA and Italy | Various |
| Leather and leather items | Germany, UK, Italy, USA and France | Uttar Pradesh |
| Engineering and electronic items | USA, Europe, Japan, Hong Kong, UAE, Germany, Belgium and France | Maharashtra, Tamil Nadu and Karnatka |
| Basic chemical and cosmetic products | USA, Japan, Saudi Arabia, China, Singapore and Netherlands | Various |
| Chemical and allied products | Japan, Belgium, Italy, France,Bangladesh, USA and UK | Various |
| Wool and woolen knitted garments | Europe, Japan, and Bangladesh | Punjab |
| Processed food items | USA, Europe and Japan | Various |
| Electronic items and computer software | USA, Hong Kong, UAE, UK,Germany, and Japan | Maharashtra, Karnataka, Andhra Pradesh, and Haryana |
| Tobacco and tobacco items | East Europe | Andhra Pradesh and Karnataka |
| Source: 11th Plan, Planning Commission | ||
Sector-specific studies are carried out to help entrepreneurs. Anti-dumping cases, that is, where a foreign supplier sells goods at lower prices to capture the domestic market are initiated and contested, and significant support is provided. Also, incentives in the form of reimbursement of 75 percent of the one-time registration fee and annual fee for adoption of barcoding is provided. The Export Credit Guarantee Corporation of India (ECGCI) provides special incentives to small exporters.
Special schemes for loans to SMEs are promoted by various banks. For example, the Bank of India gives preferences and incentives to SMEs like single-window dispensation. All these and others are present to promote SMEs. At the same time, they can utilize these concessions and can make huge gains as far as India is concerned as there is still lot of scope for the development and growth of this sector.
Subscribe to this comment's feed
written by Incense Sticks Manufacturers, December 20, 2010
written by Business Directory & B2B Portal, July 23, 2010
written by Business Directory & B2B Portal for SMEs, July 23, 2010
written by bala krishna reddy, May 18, 2010
| < Prev | Next > |
|---|
