SMEs, manufacturing sector key to spur exports: Vice President
Expressing concern over India’s contracting export and its share in the global market, Vice President Mohammad Hamid Ansari said that encouraging the manufacturing sector, especially Small and Medium Enterprises (SME) units is critical to push outbound shipment. “Emphasis on the manufacturing sector, especially Small and Medium Enterprises (SMEs) will be critical to India’s export growth,” Ansari said addressing the Calcutta Chamber of Commerce (CCC) on Thursday. Acknowledging the potential to domestic manufacture sector, he said that the country has “proved its mettle time and again” by producing a wide variety of goods ranging from world’s cheapest cars to space ship Mangalyaan. “Still India’s share in global exports is a mere 1.7% and manufacturing output as a percentage of GDP is around 13%, much lower than its Asian competitors,” he added. At present, SMEs contribute to 40% of India’s total manufacturing exports, while they account for 45% of manufacturing output. He said the sector is yet to explore its full potential due to several bottlenecks such as poor infrastructure, lack of credit, complex tax regime, archaic labour laws, and interstate trade barriers. “Upgrading the country’s infrastructure, simplifying the complex tax regime, reviewing archaic labour laws and removing barriers to interstate trade are the needs of the hour,” he said, adding that the government’s “Make in India” initiative was just a beginning to transform the country as a global manufacturing hub. India’s export growth has been an area of concern for the government. Although the growth recorded this year is better – so far at an average rate of 2.2% - as compared to 1.2% in 2013 and 2014, the sector had the potential to grow at a better rate. The share of various products in the country’s overall export has been inconsistent. The contribution of traditional export products like agriculture commodities, readymade & textiles, and leather products have more than halved to 27.3% from 56.5% in 1992, while that of transport equipment, petroleum products, electronic goods has gone up to 40% from 14% in 1992. India’s exports have expanded across various continents in recent years. Apart from trading in traditional markets, the country has now found new markets like Asia and Africa- together accounting for 60% of the country’s exports. Targeting new economies has benefitted India’s export sector significantly. But for export to grow at a better rate, India’s manufacturing sector, which contributes 60% to the nation’s total exports, will require an undivided attention both from entrepreneurs and the government, the Vice President said.
August 28, 2015 | 3:28pm IST.
to success.