India needs to focus on MSME sector to become significant global player

The country needs to spruce up its policy framework to address exporters’ finance needs if we were to become a USD 5 trillion economy, a top government official said.
“To become a USD 5 trillion economy, we need 40 per cent trade contribution and exports of at least USD 1 trillion. To achieve this, we must actually gear up our policy framework and address the precise needs of export finance and institutions serving exporters,” commerce secretary Rita Teaotia said in Mumbai on Friday.
Addressing an industry event organised by trade lobby Assocham, she said, banks and financial institutions need to become more sensitive towards small units, which contribute 30 per cent of exports in terms of value.
“We are facing several challenges on trade finance issues. Our policy framework is not entirely geared up to recognise risks of overseas markets and credit availability.
“There is a large challenge for micro, small and medium enterprises and unless we address that, we are not going to become a significant global player,” the top commerce ministry official said.
The commerce secretary also stressed upon the need to spruce up banking policy to serve the needs of small manufacturers, services sector and exporters.
She said that the commerce ministry provides both guarantees and insurance for export finance through various schemes like merchandise exports scheme.
“But these alone cannot make a difference and it is necessary for the banking sector and financial institutions to be more sensitive to these sectors,” Teaotia said.
Stressing on the importance of like gems and jewellery, pharma and handloom sectors, she said these sectors offer good potential to excel.