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Vol II, Issue 12: June 15, 2012 Activities   News   Reader Reactions   Members   Contact     Print Version  

President's Message

President-Mr V.K. Agarwal

"We welcome the initiatives announced in the policy, but they are at best tactical, not strategic. Now that Indian exports have become more competitive, we need a well thought-out strategy to push our products and services in countries where we have been outcompeted in several product categories especially in ASEAN, African and Latin American markets. "

- V.K. Agarwal, President FISME
(On foreign trade policy)
Read full press release

NID Design workshop

Date: June 27-29 , 2012
Venue: , Ahmedabad)

See Details

Avnet X-fest 2012

Date:July-August, 2012
Venue: Various cities across Asia

See Details

Electronics Rocks 2012

Date: August 30-31, 2012
Venue: Bangalore

See Details

NCEDAR 2012

Date:December 4-6, 2012
Venue: Bangalore

See Details

MSMEs say weak Re will fail to spur growth: Survey

FISME survey

According to The FISME Factor survey, a majority of MSMEs, 57%, think the competitive advantage provided by the weak rupee will fail to spur growth unless the government takes strategic steps.

Dear Readers,
FISME has once again shown the way when it comes to protecting the interests of the Indian MSME sector. While most industry bodies merely welcomed the measures announced in the annual supplement to India’s foreign trade policy on June 5, 2012, FISME boldly pointed out that the measures were at best tactical and not strategic in nature. The FISME President hit the nail on the head by saying we need to take advantage of the “historic opportunity” presented by the weak rupee and step up strategic efforts for Indian exporters to penetrate new markets and cut their dependence on the troubled Eurozone and the sluggish US market. FISME has rightly highlighted that the trade policy has failed to do that and it must be supplemented with a strategic thrust to help Indian exporters penetrate new markets now that they are more competitive compared to their other Asian competitors. In this issue, we bring to you a few articles which bolster this FISME view point. Read and stay ahead of the competition!
Editor
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Trade Trends

India’s Look East Policy and Myanmar


The normalization of relations with Myanmar under India’s Look East Policy will help Indian exporters to penetrate the huge potential market represented by Myanmar, the ASEAN bloc and other South and Southeast Asian countries, writes Absar Alam.

Latest ‘sops' will help exporters not exports hit by global recession


The Commerce Ministry has just released the annual supplement to the Foreign Trade Policy 2009-14 amidst a pervasive gloom over almost the entire global economy.

Policy Polemic

Re-aligning India's export focus – the need of the hour


After India's export growth staggered to 3.2 per cent in April, the industry was expecting some big-ticket reforms to kick-start an ailing manufacturing sector and revitalise exports.

Global risks and domestic response


After India's export growth staggered to 3.2 per cent in April, the industry was expecting some big-ticket reforms to kick-start an ailing manufacturing sector and revitalise exports.

Finance Fundamentals

Securing the entire family with Group Health Insurance policy


Group Health Insurance provides many advantages over individual insurance for both employers and employees. Argues Abhishek Bondia.

Marketing Mantras

Ways to get ads for your SME website


Having a website for your business to promote the products or services is always the icing on the cake. Your potential customer can have an online view of the product on your website and that you can convert it into a business opportunity.


Directory of Testing Laboratories in India

Directory of Testing Laboratories in India
Buy our one-of-a-kind guide to all industrial testing laboratories in India. Find the one most convenient for getting your products tested and certified. An invaluable compendium for all industrial units and exporters.
PP: 894, Hard Cover.
Price: Rs 900.
50% discount for members.

Handbook for Managing Export Payment Risks 

Fismi-Book-Cover-front
If you are an exporter you simply cannot do without this unique publication which tells you how to manage payment and other risks arising from exports.
PP: 78.
Price: Rs 300.
50% discount for members.

Free Publications

Fertilizer quality control in India: Need for change 

Fertilizer-Book-small
This monograph argues for a systemic change in fertiliser quality control. Essential reading for those in policy-making positions.
FISME regularly receives monthly reports on the economies of various countries from their missions in India. These reports provide information on key economic parameters, trade related information and all news relevant for importers and exporters. In this edition you can take a look at reports on:

FISME-NID hold design workshop for Meerut Scissors cluster

FISME in collaboration with the National Institute of Design organised a five-day workshop (June 12-16, 2012) in Meerut to present to stakeholders the results of a need assessment survey for design interventions in the Meerut scissors manufacturing cluster. The survey was conducted by Industrial Designer and Design Consultant Amita Bhatnagar on behalf FISME and NID under the MSME Design Clinic Scheme. The workshop was attended by about 40 scissor manufacturers located in the scissor manufacturing cluster in and around Meerut. At the workshop, the design consultant together with FISME and NID officials made presentations on the survey results and sought the views of the manufacturers regarding the results and recommendations of the survey.

FISME organises Seminar on MSMEs in GIM, 2012

FISME organised a seminar on micro, small and medium enterprises (MSMEs) during the Global Investor’s Meet, 2012, in Bangalore. While the GIM was during June 6-8, the seminar on MSMEs was organised on June 7, 2012. Immediate past President of FISME Shri Mohan Suresh delivered the welcome address at the seminar. Investors from the MSME sector, directors and officials of public and private sector banks, government officials, media representatives and visitors interested in the MSME sector were present at the seminar.

Trade policy tactical, strategic thrust needed, says FISME

As compared to most other leading industry bodies in India, FISME, India’s leading MSME organisation, took a different stand on the annual supplement to India’s foreign trade policy announced on June 5, 2012 by the Commerce and Industry Minister Mr Anand Sharma. While welcoming the measures announced in the policy, FISME was, perhaps, the only industry body in India that pointed out that these measures were at best tactical and not strategic and they would have to be supplemented with a strategic thrust to take advantage of the depreciation of the rupee which is here to stay in the short and medium term. “These initiatives are at best tactical not strategic,” FISME President Mr V.K. Agarwal said in a press statement that got wide coverage in the media.
Has the govt. failed to provide a strategic thrust in the measures announced in the annual supplement to India's foreign trade policy on June 5, 2012?

Planning Commission survey on business environment

On behalf of the Planning Commission of India, the Institute for Competitiveness, New Delhi, is conducting a survey of Indian micro, small and medium enterprises to assess the business environment of each state of India. The response to the questionnaire will help the Indian government to formulate policies for improving business conditions in every state and enhancing the overall competitiveness of the country. All MSME readers are requested to enthusiastically respond to the questionnaire. The questionnaire is available at http://competitiveness.in/india-competitiveness/planning-commission or Download Questionnaire and will take around 20 minutes to fill up.
AITD survey on India-Bangladesh Trade Facilitation
On behalf of UNESCAP, the Asian Institute of Transport Development (AITD), New Delhi, is conducting a trade facilitation study between India and Bangladesh. The objective of the study is to analyse the impediments of cross border trade between the two countries. Accordingly, policy recommendations would be made to government for simplification of trade procedure. The AITD is conducting a questionnaire survey of stake holders, particularly exporters as part of this study. Readers are requested to respond to the questionnaire and send it to asianinstitute.del@gmail.com Or alamabsar@gmail.com. The questionnaire is available at Download Questionnaires.doc and will take around 10 minutes to fill up.

Macro Metre

Inflation rises in May: Analysts expect RBI to cut rates

Despite a pick-up in the Wholesale Price Index (WPI) for the month of May, analysts are optimistic that the Reserve Bank of India (RBI) will go for a cut in its key policy rates on June 18. The rise in the WPI to 7.55 per cent from 7.23 per cent in April came as both food and fuel prices picked up. Traders said that core inflation, which excludes volatile food and fuel prices, was around 5 percent, giving the Reserve Bank of India (RBI) room to cut its policy rate.
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April IIP at 0.1% versus -3.2% in March, worse than expected

Industrial production growth rate slowed down sharply to 0.1 per cent in April versus (-) 3.2 per cent due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy that may prompt RBI to cut lending rates. Growth in factory output, as measured by the Index of Industrial Production (IIP), was 5.3 per cent in April last year. The slowdown in industrial production is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18.
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Exports shrink 4%, imports dip 7.4% in May

The Government's miseries on the economic front are mounting. After a flat industrial output growth in April, the provisional data released on Thursday by the Commerce Ministry revealed that exports in May shrank 4.16 per cent year-on-year to $25.68 billion. The growth slump (the second time in three months) was due to the weak demand in the traditional markets — the European Union and the US.

Domestic Digest

SBI cuts SME, agri loan rates by 50-350 bps

State Bank of India (SBI), the largest public sector lender in the country, reduced its loan rates for the agriculture and small & medium enterprise (SME) sectors by 50-350 basis points. The new rates, effective from June 1, aimed at pushing credit off take comes three days before the Reserve Bank of India’s (RBI’s) mid-quarter monetary policy review. Santosh Nayar, deputy managing director and group head, corporate accounts, told reporters recently. Adding: “The interest rate on retail loans such as personal, housing and car loans have been untouched.”

SBI lists 600 branches to target SME clusters

India's largest bank, State Bank of India (SBI), has assigned 600 bank branches to target micro, small and medium enterprise (SME) clusters across the country. “We are in the process of mapping these branches to SME clusters across the country. The credit delivery to SMEs becomes faster by targeting these clusters,” said Manas Kumar Nag, chief general manager, SME Business Unit, SBI.
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N-E demands revision of NEIIPP to put thrust on MSMEs

The North Eastern states have demanded “revision” of the centre sponsored North East Industrial and Investment Promotion Policy (NEIIPP), 2007 to shift the focus from heavy industry to micro and small scale sector. The eight North Eastern states, including Sikkim, have collectively stated that though the NEIIPP “had been good for the region” it needs to put thrust on micro and small scale sector as there were “constraints” on the part of the states in attracting big ticket investments.

Huge demand for SME financing not met: Crisil

There is a deficit of Rs 10 trillion (10 lakh crore) in financing for the SME sector. This was revealed by Sachin Nigam, director of SME ratings of Crisil, in his keynote address at SME Connect, a seminar organized by Moneycontrol.com. The demand for SME finance is Rs 16 trillion (Rs 16 lakh crore), but the available finance is about Rs 6 trillion (Rs 6 lakh crore), Nigam said.

FM to review performance of PSBs

Against the backdrop of tough economic conditions, Finance Minister Pranab Mukherjee will review the annual performance of government-run banks and financial institutions recently. Mukherjee would meet with chiefs of public sector banks and financial institutions to review their performances. The review would focus on credit to agriculture and MSME, housing and education loans, gross and net Non-Performing Assets (NPAs), an official release recently.

MSME credit flow grows 25%

Banks have logged growth of 24.59 per cent in credit flow to the MSME (micro, small & medium enterprises) sector in 2011-12. Total advances to the sector stood at Rs 2812.48 crore in last fiscal. The share of advances to small enterprises in the MSME segment was the highest at Rs 1322.86 crore made available through 4972 accounts. Credit to micro and small units stood at Rs 1101.08 crore and Rs 388.52 crore respectively, according to latest data compiled by State Level Bankers' Committee (SLBC).
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UP mulls new industrial policy to help SMEs

In order to help state small and medium enterprises (SMEs), the Uttar Pradesh government will engage with industrial and business bodies June 11-13 to frame the new Infrastructure, Industry and Service Sector Investment Policy for 2012. Officials said the draft of the proposed policy has been in public domain for some time. Suggestions had been invited from all stakeholders.

Karnataka Global Investors' Meet exceeds investment target

It is raining trillions (crores) of rupees in Karnataka at its second Global Investors' Meet (GIM 2012) even though the advancing south-west monsoon is yet to hit this tech hub. "We have received investment proposals worth a whopping Rs.7.6 trillion (Rs.7.6-lakh crore) from 730 global and Indian firms, exceeding the modest target of Rs.6 trillion (Rs.6 lakh crore) set for the second edition of GIM," state Chief Secretary S.V. Ranganath announced at the valedictory function of the two-day mega event. "The sunrise micro, small and medium enterprises (MSME) sector has for the first time attracted investment proposals worth Rs.35, 000 crore (Rs.350 billion)," Ranganath asserted.

Corp Bank opens SME Loan Centre in Coimbatore

To augment credit flow to the SME segment, Corporation Bank opened its exclusive SME Loan Centre in Coimbatore recently. This is the bank’s eighth SME loan centre. The others are located at Delhi, Hyderabad, Bangalore, Chennai, Pune, Mumbai and Vadodara. Mr Ajai Kumar, Chairman and Managing Director of Corporation Bank, formally launched the SME Loan Centre. The bank plans to open eight more SME Loan centres in the next two months, said Mr Ajai Kumar.

Nashik to soon have first common testing Lab for SMEs

With an aim to provide product testing and R&D facilities exclusively for micro, small & medium enterprises (MSMEs) across Nashik, the MSME Development Institute, Mumbai, under the ministry of MSME, has in principal approved the proposal for setting up a Testing Lab in Nashik city and a tool unit in Sinnar industrial estate, about 30 km away. The Testing Lab would be the first in Nashik district for MSMEs. The decision to this effect was taken by the MSME Development Institute at a meeting held in Nashik with Nashik Industries & Manufacturers' Association (NIMA).

Auto component exports to grow despite EU crisis

India's auto component exports is expected to grow by 15 percent in the current fiscal as there has been a continuous demand flow from the European markets, said the Automotive Component Manufacturers Association (ACMA), Executive Director, Vinnie Mehta. "It is an interesting paradox that while the European economy is under stress, our export to Europe has continued to grow. Europe is one of the largest trading partners for India in the auto component sector and accounts for 35% of our exports," he told SME Times.
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KVIC providing facilities and affordable technologies

The Ministry of Micro, Small and Medium Enterprise (MSME) has informed that Khadi and Village Industries Commission (KVIC) undertakes various schemes and programmes for the holistic development and promotion of khadi and village industries, which includes reaching to the grassroots level and providing facilities and affordable technologies. Mahatma Gandhi Institute for Rural Industrialization (MGIRI) at Wardha, a national-level institute, undertakes research, design and extension activities in the rural industries sector, the ministry said in a press statement recently.
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Indian Bank organises home & MSME loan mela

The Tiruchi circle of the Indian Bank organised home loan and MSME (Micro, Small and Medium Enterprises) mela at all its 61 branches in Tiruchi, Karur, Pudukottai, Ariyalur and Perambalur districts recently. K. Manoharan, zonal manager and zonal head, Indian Bank, Tiruchi zone, inaugurated the mela at Tiruchi Cantonment branch. He handed over sanction letters to beneficiaries on the occasion.
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"MSME financing presents a scalable funding opportunity"

Religare Finvest Limited (RFL), a subsidiary of Religare Enterprises Limited (REL), is a SME- and MSME-focused lender having a loan book size of Rs 13,000 crore built organically over the last three years and targeting Rs 25,000 crore in the next two years. In an e-mail interaction with Pravda Godbole, Kavi Arora, RFL’s CEO, dwells on the issue of finance for MSMEs and the company’s decision to focus on this sector.
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SIDBI, Glocal Healthcare to set up hospitals on PPP model

Apex financial institution SIDBI plans to partner with West Bengal-based Glocal Healthcare Systems to set up corporate hospitals in rural areas through the Public Private Partnership (PPP) route. SIDBI facilitates promotion, financing and development of industries in the micro, small & medium enterprises. On June 9, the first such corporate rural hospital was built across a 3-acre land in the Murshidabad district of West Bengal on the PPP model.

Focus on UAE    

Dubai launches index to boost ties between banks & SMEs

Dubai SME on Monday launched the ‘SME Friendliness Index’ that will help enable banks to access 230,000 SMEs in the UAE and realise up to Dh6 billion SME financing revenue opportunity. The index is a signalling tool that gives constructive feedback to banks about how their SME strategies are actually working, according to Dubai SME-the agency of the Department of Economic Development mandated to develop the SME sector.

Focus on UK    

New bank launches in the UK, targeting SMEs

A new bank targeting established small to medium sized enterprises (SMEs) has launched. Cambridge & Counties Bank says it will provide SMEs with loans secured against commercial property as well as a deposit account. In addition to this, it will also offer secured pension scheme lending, and has plans to launch professional firm financing, as well as other savings accounts into both the retail and non-retail sectors.

Focus on Thailand    

New stock exchange board for smaller firms considered

A stock trading board for smaller companies and startups is currently being considered, says Vorapol Sokatiyanurak, secretary-general of the Securities and Exchange Commission (SEC). High-yield bonds are also being researched as another possible funding option for small and medium-sized enterprises (SMEs). The aim is to enable an additional 10,000 companies to access the capital markets by issuing bonds or listing on the new board, which if formed would be the country's third.

The FISME Factor is impressive and informative, say readers

Read what readers have to say on this newsletter and various other issues.

Business Opportunities for India in Canada

There are business opportunities available for Indian companies in Canada. The interested candidates can check details.

8 new members join FISME

During the period June 1, 2012 to June 15, 2012 a total of 8 new MSMEs became members of FISME.

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This Newsletter is edited by the FISME Secretariat. We welcome contributions as well as comments and suggestions. Please write to newsletter@fisme.org.in

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