According to the last census on SSI’s, in spite of their sizeable contribution to exports, less than 0.5% of the SSI’s are actually engaged in exports. On macro policy front, while over the years India’s foreign exchange reserves have swelled to more than US$ 250 Billion - and the need for exports looks less pressing, the ballooning trade gap stands a reminder on the need for continued thrust on exports. Beyond macro economic needs, the engagement with exports is very important for SME’s for three major reasons. Firstly, in today’s globalized world with increased lowering of trade barriers and massive competition in domestic markets, it is essential for SME’s to keep benchmarking their competitiveness.
Ability to export is a reliable barometer of their competitiveness vis a vis their counterparts in other countries. Secondly, active participation in exports exposes SME’s to evolving market trends, quality and standards enabling them make informed decisions. Thirdly, it has been observed that participation in exports induce positive externalities in the firms in the form of better management practices, higher wages and better working conditions.