Easy access to finance, incentives to help MSMEs push exports: Connect2India

The government should take steps to improve access to credit and extend incentives to encourage micro, small and medium enterprises (MSMEs) push exports, world trade information provider Connect2India said on Saturday.

Connect2India founder and CEO Pawan Gupta said that MSMEs hold huge potential to increase the country's exports.

He said these enterprises can help India achieve USD 2 trillion global trade by 2025.

One of the key pre-requisites for a first time MSME exporter looking to export globally is easy access to trade finance, and more specifically the pre-shipment finance, he said.

"The easy access to trade finance would allow MSMEs, including agro producers to export directly without dependency on merchant exporters," he said in a statement.

Gupta also suggested for providing interest subsidy on the post and pre-shipment export to all MSMEs.

"Seminars needs to be conducted to increase the level of awareness about ECGC schemes, awareness about payment risk can be revealed by ECGC and premium rates must be reduced further to cover more MSME customers," Gupta said.

Currently, the sector accounts for about 40 percent in the country's total exports, which grew by 9 percent to USD 331 billion in 2018-19.

The government announced a slew of measures in the budget to support MSMEs' growth.

Finance Minister Nirmala Sitharaman said that Rs 350 crore has been allocated for 2019-20 for 2 percent interest subvention for all GST-registered MSMEs for fresh or on incremental loans under the interest subvention scheme for such enterprises.

The government will create a payment platform for MSMEs to enable filing of bills and payment on the platform itself, Sitharaman said.

V Lakshmikumaran, Managing Partner, Laxmi Kumaran & Sridharan Attorneys, said, "The Budget promises significant benefits to the MSME’s and the individuals in lower and middle sectors."

Connect2India offers global trade intelligence, resources, and tools on its integrated trade platform.