Background of Export Promotion
Exports from the small scale sector over a period of time have acquired great significance in India's foreign trade. The MSME Sector today constitutes a very important segment of India's economy and it accounts for nearly 40 of the gross value of output in the manufacturing sector and about 50% of the total exports from the country. Direct exports from the MSME Sector accounts for 35% of the total exports.
Export Promotion from the small scale sector has been accorded a high priority in the India's export promotion strategy. The small industries due to their inherent strengths of low capital investment, high employment generation, maximum utilisation of capacity, flexibility in operation, etc. are highly conducive for rapid industrialization and generation of export surpluses.
An idea about the contribution of small scale sector in country's total exports can be had from the table given below:
Export assistance & Facilities
Export Promotion from Small Scale Sector has received utmost priority of the Government. Every Policy formulated for achieving growth in exports have a number of incentives to small scale exporters so as to maximise export earnings. Such incentives include :
Export Strategies for Small Scale Sector
Broadly, exports strategy for small sector includes simplification of export Procedures and to provide incentives to the small sector for higher production and to maximise export earnings. With a view to formulate trade policy with simplified procedures which are conducive for export promotion. Export-Import policy is formulated after consulting various trade bodies like Federation of Indian Export Organisation, Federation of Indian Chambers of Commerce & Industry and different Export Promotion Councils, etc.
Export-Import Policy for Small Scale Sector
Recognition of Export
Houses/ Trading Houses, etc.
Special Import Licence
Participation in International Fairs/Exhibitions
With a view to ensure that exporters from small scale sector exhibit their products in the International Exhibitions, required assistance & support is provided. Expenditure on account of space rent, handling and clearing charges, insurance and shipment charges etc. are met by the office of the Development Commissioner (Small Scale Industries) under one of the plan schemes.
During 2000-2001, O/o the DC(MSME) participated in 7 International Trade Fairs/ Exhibitions. Participation in the named fairs/exhibitions generated large number of Trade enquiries besides certain export orders. It also provided an opportunity to MSME units to display their products in the world market. During the current financial year, it is proposed to participate in 8-9 International fairs/ exhibitions. The basic objective behind this scheme is that MSME units which otherwise are not in a position to display their products may participate in foreign exhibition/fairs so as to promote their exports. Enquiries generated during such exhibitions abroad are disseminated to all MSME units through a net work of field offices of this organisation. This strategy has been found to be successful for exporters from small scale sector in identifying new foreign buyers/markets.
Packaging for Exports
Role of packaging for exports has gained much significance in view of trends in the world markets. The need for better and scientific packaging for exports from small sector was recognised long back. With a view to acquaint MSME Exporters of the latest
Packaging standards, techniques etc. training programmes on packaging for exports are organised in various parts of the country. These programmes are organised in association with Indian Institute of Packaging which has requisite expertise on the subject. Basic objective of these programmes is to generate the much needed consciousness in the industry and to educate the entrepreneurs about the scientific techniques of Packaging.
Bar-coding for Exports
A new program has been drawn up with the assistance of EAN India to sensitise Indian exporters about barcoding. 7 training Sessions were conducted in 2000-01 at different locations across the country. More Sessions are planned this year.
Technical & Managerial Consultancy Services
Technical & Managerial Consultancy Services to the MSME manufacturers/exporters is provided through a net work of field offices of this office so as to ensure higher level of production and generation of higher exports.
National Awards for Quality Products
With a view to encourage the small scale units for producing Quality goods, National Awards for Quality Products are given to the outstanding small scale units, who have made significant contribution for improving quality of their products. The scheme is being operated since 1986. Winners of National Awards get a Trophy, a Certificate and a Cash Prize of Rs.25,000/- National Awards encourage Small Scale Industries units to produce quality goods which further enables them to enter into export market.
MSME MDA Scheme
The scheme offers funding upto 90% in respect of to and fro air fare for participation by MSME Entrepreneurs in overseas fairs/trade delegations. The scheme also provide for funding for producing publicity material (upto 25% of costs) Sector specific studies (upto Rs. 2 lakhs) and for contesting anti-dumping cases (50% upto Rs. 1 lakh) - for individual MSMEs & Associations.
Marketing Development assistance (Ministry of Commerce)
Marketing Development Scheme (MDA) is also being operated by Ministry of Commerce under which MDA is given to exporters through FIEO and Export Promotion Councils/ Commodity Boards to plan their marketing strategy for export growth. Guidelines in respect of single person sale-cum-study tours abroad and participation in fairs/ exhibition abroad have been revised with effect from 1st May, 1999. The revised scheme, is as under :-
NOTE : Ministry of Commerce, MDA Section may be approached for other conditions/guidelines, payment terms, documents to be submitted etc. Their Circular No. 1(3)/99-MDA dated 28/4/1999 refers.
Awards to Exporters
Ministry of Commerce gives awards to exporters for their outstanding export performance, under the scheme of National Export Award for export performance. Earlier, a total of 17 Awards including 5 Awards for Small Scale Sector in the form of Trophy were given every year. However, from the year 1997-98 and onwards, the number of awards have been increased to 20, out of which the number of Awards (Trophy) earmarked for small scale sector have been increased from 5 to 8. Upto 8 awards will be given to the exporters in the small scale and cottage sector subject to achievement of normative level of performance by the concerned MSMEs and cottage sector units. Out of 8 Awards., one will be given for Khadi & Village Industry.
To meet the challenges of international competition and to promote exports of MSME products, following promotional schemes are also being implemented.
and Modernization Fund Scheme
Other Schemes for technology improvement
Tool Rooms provide toolings, dies, moulds and fixtures to small scale units at a very low price to enable them to produce quality goods to meet the requirements of supplies of components to large units as well as produce quality goods for direct sale. This enhances their competitiveness and export potentials. There are 10 Tool Rooms established in various parts of the country.
Process-cum-Product Development Centres :
There are 6
Process-cum-Product Development Centres. These Centres take up jobs from
MSMEs for specific product development as well process development to
improve the quality of products, reduce cost of product and enhance
marketability of goods.
Small Industry Cluster Development Program:
A new scheme for technology upgradation for industrial clusters has been started recently. 10 clusters of industries producing different groups in various parts of country have been selected. The scheme aims at diagnostic study of the clusters, identification of technological needs, technological intervention and wider dissemination of information and technology within the clusters. The expenditure involved on pilot plants etc. Is to be met on 50:50 cost sharing basis by the Government and the concerned Industry Association of the clusters. The scheme is flexible and provides for smooth sourcing of technology even from abroad.
National Small Industries Corporation
The National Small Industries Corporation (NSIC) through its export development programme is playing a vital role to promote the MSME sector in exporting their products/projects in international, markets by providing following assistance to the small enterprises.
Marketing and Promotion
- Pre and Post Shipment
finance at concessional rate of interest
- Laboratory and Testing
assistance for improving quality of products
Effecting product improvements
NSIC has been instrumental in developing a large number of small scale units to export high quality products such as builders hardware, locks, light engineering products, giftware and novelties, readymade garments and textile products.
Following activities are also undertaken by NSIC for Export Promotion through MSME
- Study visit to various
developed countries to identify the product range and their market