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Upswing in SME export growth rate: CII
By siliconindia
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Thursday, 05 September 2002, 19:30 IST
NEW DELHI: The export scenario for the Small & Medium sector in the country is on an upswing for the next six months, according to the 17th CII Business Outlook Survey for SMEs.
The survey, conducted by the CII National Small Business Council, has also highlighted various issues like the cost of credit and procedural bottlenecks as factors that would play a crucial role on the export growth rate during the next six months.
The survey, based on the feedback of approximately 65 percent (exporters) of the 1000 responses from CII Small & Medium Enterprises (SMEs) members, has revealed a moderate impact on exports following the dismantling of the Quantitative Restrictions (QRs). The survey has revealed that 53 percent of the respondents are concerned regarding the decline in their Profit Margins due to increase in competition. C P Rangachar, Chairman, CII Small Industry Council, said that despite procedural bottlenecks the outlook for exports is good.
According to the survey, 56 percent of the respondents envisage an increase in volume of their exports, 34 percent feel that the market would be stagnant, while 10 percent of the respondents expect a decline in their exports in the next six months. However, in value terms, 58 percent of the respondents foresee export value to increase while 31 percent expect it to remain the same, where as 11 percent of the respondents expect it to decrease in the next six months.
The initiatives taken by the Government such as the Small Business Act, the draft of which was tabled at the Small Industry Board, would provide an impetus for growth, the CII Chairman added.
The CII survey has also highlighted that 83 percent of the respondents foresee an increase in the rate of growth of exports in the next six months. Of these (83 percent), 43 percent of the respondents expect the rate of growth of export to be between 0-10 percent, 17 percent respondents expect an increase in the rate of growth of exports between 10-20 percent, while 23 percent of the respondents expect it to be more than 20 percent. However, 17 percent of the respondents expect a decline in the rate of growth of exports in next six months, the survey has revealed.
On the impact of dismantling of the Quantitative Restrictions (QRs), the CII survey has revealed that 45 percent of the respondents are maintaining status quo towards the effect of dismantling of QRs in the post EXIM Policy 2001-02 period while 40 percent of the surveyed respondents feel that their sectors has been affected by the removal of Quantitative restrictions (QRs). Only 15 percent of the respondents have experienced a positive impact on their business since removal of Quantitative restrictions (QRs), according to the survey.
The other factors that have an impact on exports besides Cost of Credit and Procedural bottlenecks, as pointed out in the survey, are price, delay in payments, increasing global competition, delay in clearances by port, anti subsidies and anti dumping duties levied by importing countries, exchange rate and non tariff barriers.