'Create special fund to support MSME exporters'

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SME Times News Bureau | 15 Aug, 2012
Exporters' body Federation of Indian Export Organisations Tuesday said that the Centre needs to take some urgent steps, including introduction of special funds for export development and marketing support, to help the country's manufacturing and MSME export sectors.

"Aggressive marketing and an export development fund is need of the hour," said FIEO President, M Rafeeque Ahmed in a press statement, reacting to July export data.

He advocated for an Export Development Fund with a corpus of 0.5% of FOB Value to enable MSME exporters to aggressively enter the unexplored markets. "A large number of countries are supporting their SMEs and we should also lend our MSMEs a helping hand," he pointed out.

According to official figures released Tuesday, export from the country declined 14.8 percent to $22.4 billion in July, compared to July 2011 when they were $26.3 billion. Trade deficit widened to $15.5 billion for the month, on account of excess of imports ($37.9 billion) over exports.

Ahmed added that the Government needs to look into the cost of credit which is adversely impacting both exports as well as manufacturing. "The high cost of credit is making it difficult for entrepreneurs to increase their capacity or modernize the same," he added.

"Moreover, with contraction in demand, more focus should be on aggressive marketing for which Government should provide liberal marketing support through MAI and MDA Schemes to MSME exporters," he said.

Ahmed stated that the dip in export growth is primarily on account of sluggish global conditions and slowdown in domestic manufacturing.

While reduction in imports is encouraging, he said, one needs to look into the profile of such imports so that decline in imports should not have affect on domestic manufacturing sector. "However, the overall decline in deficit is good for economy and may have a positive impact on Rupee," added the FIEO president.