2
nd Workshop onboosting exports from SMEs
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| Mr. Arvind Singh, Commissioner of Customs, Mangalore, delivering the inaugural address. Others from left, are Mr. K N Prabhu; Mr. Walter D’Souza and Mr. K.Sailesh, Regional Head, Elite Trade Group ICICI Bank. |
Continuing the series of workshops on issues concerning small and medium exporters, FIEO, in association with ICICI Bank, organized its 2nd Workshop titled ‘Focus SME: Growth Opportunities for Exporters’ at Mangalore on 10th December. More than 120 exporters from Coastal Karnataka region participated in the Workshop.
While welcoming the participants, Mr. Walter D’Souza, Convenor, FIEO Committee on Agro Exports and AEZ expressed disappointment over the recent credit policy announcements made by the RBI. He said, "No significant measure was announced to reduce the cost of credit to the SMEs. On the contrary, an increase in the CRR by 50 basis points was announced. This would restrict the flow of credit to the SME sector and would create a liquidity crunch affecting trade and industry."
Referring to the plight of small and medium exporters under appreciating rupee, Mr. D’Souza expressed further disappointment over the relief measure announced by the government. "Stung by the steep decline in the export from sectors that have less import intensity but greater labour intensity, sector-specific relief measures announced by the government meet only part of the concerns of exporters who are reeling under relentless rise of rupee. Measures, such as, modest increase in Duty Entitlement Pass Book Scheme, interest rate subvention of two percentage points per annum to all scheduled banks in respect of export credit to the specified categories of exporters in the small and medium enterprise sector, and service tax exemptions for a few select services etc., are insufficient to check the continuous erosion of export profits." Mr. D’Souza said.
Terming credit as the lifeline of business, Mr. D’Souza said that small and medium enterprises lack access to capital and money markets and so the banks should offer custom-made cost effective products to them.
According to Mr. D’Souza, labour intensive small enterprises can create massive employment opportunities in Tier II and Tier III cities besides promoting their overall economic growth by using local resources. However, says Mr. D’Souza, rising transactions costs, coupled with lack of availability of proper infrastructure, have in recent past threatened the export prospects of cities like Mangalore. He urged the authorities to expedite the process of setting up air cargo complex and cold storage facilities at Mangalore international airport.
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"Small scale sector today is one of the largest contributors to the foreign exchange reserves of the country and it is shouldering more challenging responsibilities in promoting the overall exports from the country. During 1990-91, the direct export share of SSI in India’s total export was below 30% with a total value of approximately Rs.9442 crore. During 2006-07, the contribution from SME sector was to the tune of Rs.2,05430 crore, recording 26% increase over previous year’s export of Rs.1,64,310.
Exports from Karnataka grew at more than 25% in the last three financial years. Karnataka recorded an export turnover of Rs.1,02,000 crore during 2006-07. According to industry estimates, during 2006-07, export from Costal Karnataka, the region having preponderantly small and medium exporters, was to the tune of Rs.14,500 crore. This figure is expected to be doubled by the year 2010 if proper infrastructure and other facilities are provided to the industries in this area."
Mr. Walter D’Souza Convenor, FIEO Committee on Agro Exports and AEZ |
While inaugurating the Workshop, Mr. Arvind Singh, IRS, Commissioner of Customs, Mangalore underlined the importance of e-commerce in international trade and exhorted the exporters to make use of it. He said, "E-commerce reduces business cost and improves visibility in global marketing. Exporters should implement business models like Just-in-Time system of goods delivery. It requires high performance in terms of punctuality, reliability, pricing and operating time."
Mr. Singh further advised the SMEs to adopt ‘cluster approach’ to meet the new challenges. Some of the advantages of the cluster approach, according to him, are - networking among enterprises, economy of scale, improved bargaining power, technology and skill up-gradation, global visibility, easier access to finance, greater institutional support, etc.
Mr. K N Prabhu, President, Kanara Chamber of Commerce & Industry, Mangalore in his address said better workforce at cheaper package, greater work efficiency, low attrition level, good infrastructure, low real estate prices and better transport system make Mangalore an ideal investment destination. SMEs require technology and marketing for development. Even though they are able to adopt latest technologies, they are unable to gear up with the demand of huge marketing costs, he added.
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Mr. Prabhu advised the exporters to stick to quality and time bound delivery saying that the importers are not fully confident placing order with the exporters who are stationed in smaller cities.
Mr. Rahul Kamath, Partner, Bola Surendra Kamath & Sons, Mangalore said the SME units, especially from agri and food product sector in the region, are facing problems related to credit flow apart from inadequate infrastructural |
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One of the SME participant raising an issue. |
facilities. According to him, the region offers good potential for agro industries as well as agro processing industries.
Mr. Prasant Laxmeshwar, Zonal Head, West & South, SME Group, ICICI Bank explained about the SME Toolkit advisory services offered the Bank. "SME Toolkit is a project of the International Finance Corporation, a member of the World Bank Group. The SME Toolkit offers free business management information and training for small businesses / small and medium enterprises (SMEs) on accounting and finance, business planning, human resources (HR), marketing and sales, operations, and information technology (IT). The SME Toolkit offers a wide range of how-to articles, business forms, free business software, online training, self-assessment exercises, quizzes, and resources to help entrepreneurs, business owners, and managers in emerging markets and developing countries start, finance, formalize, and grow their businesses." He said.
Mr. Krishnamurthi Josyula, Manager, Online sales, & Operations, Google India spoke on internet marketing solutions for SMEs. Ms. Ramya Ballal, Global Markets Group, ICICI Bank made a presentation on forex risk management and hedging tools.
