MSME businesses in the country are growing at an unprecedented rate.
A lot of the trade activities that are undergoing in the country and
beyond are linked with the performance of the MSMEs. The MSME
businesses need to be aware well in advance about the possible issues
that they might have to face due to the rise and fall in demand for their
products and services locally as well as internationally. Majority of the
MSME exporters facing demand squeeze right now need to make sure
that their crisis management team is aware of the current happenings
and are taking a step forward to manage the issue at hand.
The condition of the global economy is at a very crucial point. There is
an air of recessionary wave all around. Many of the central banks all
across the globe are increasing their interest rates in order to tackle the
ongoing issue of rising inflation. This leads to a downturn in the
financial markets and as a result it can be observed that consumer
confidence is at an all time low across different parts of the world. It is
very difficult for businesses to survive in such an environment and
create products. There is a huge havoc created due to the supply chain
issues that gave rise due to the ongoing Russia war. Majority of the
international logistics systems are facing a lot of issues due to this. It
may also be observed that many of the businesses that are operating in
the auto parts and components sector have also been getting very
small order due to which they are working only at their 50-60 percent
of their overall capacity.
MSME exporters from India are facing a lot of slowdown due to the
Russia war and in order to deal with this issue, some of the MSMEs
have sought the intervention of the Government in order to deal with
this situation. Many of the industry stakeholders are also trying their
level best to help sort this issue out at its earliest so that it does not
have lasting effect on the Indian economy. On the other hand, there is
relatively fair demand in the local market that is slowly building up
which is a good sign for the MSME businesses. Those businesses that
cater to a wider audience globally are severely affected due to this
downturn. Many of those MSME exporters have pending orders for
only few more months. It is becoming increasingly important each day
for MSME businesses to make sure that effective risk parameters are in
their right place. Severe drawbacks in the economy sometimes forcibly
lead the businesses to close down. This is not a very favorable outcome
for many of the businesses belonging to the MSME sector.
It is the primary role of the Government to step in during such
moments of crisis and help the MSMEs find a better way of tackling the
issues at hand. The Ministry of MSME follows up with all the current
trends in the market and effectively guides the MSMEs to move
forward. Many of the top Indian MSME businesses are currently
running their factory facilities at mid or full capacity but their order
book positions are dwindling gradually for the season ahead. This is a
serious concern for many of the businesses that are primarily into the
exports side of the MSME sector. Almost all of them are planning on
how to effectively deal with this situation at hand.
For more information: https://smeventure.com/msmes-account-for-24-womens-participation-than-others/
There is an issue of rising inflation in the United States that has caused
majority of the downturn in the global economy and as a result many of
the businesses all across the globe are facing crisis. India MSME sector
has to also bear the brunt of this issue that has taken place due to the
downturn in the US economy. Many of the MSME businesses in India are
right now finding ways to deal with this issue by finding more opportunities
at other places. India in global market has many unfulfilled potential that
are yet to be realized. There is no better time than now for Indian businesses
to identify the key areas where India could play a strategic role and deliver
products to make up for the losses due to the imposition of the US economic
meltdown. It is important for all MSMEs to realize in advance what role each
of them could play to increase MSME exports from India to other countries
where there is growing demand for its products.
In the last one and half year, the amount of MSME exports from India
have dipped marginally for the first time while the trade deficit has
tripled to record amount of USD 31 billion fueled by the increase in
over 70 percent rise in crude oil imports. As per certain estimates, the
outbound shipments during April-July 2022-23, however, stood at USD
156.41 billion, an increase of 19.35 per cent over USD 131.06 billion in
the corresponding period last fiscal year.
Do watch: https://www.youtube.com/shorts/fHxcFnups64
It is a well known fact that the US is India’s top most destination for
exports worldwide, it is also important to mention that other European
nations including the Netherlands, Belgium, Germany, Italy and France
are among the top 20 destinations for exporters worldwide. The global
supply chains have severely been impacted due to the rise in the
escalation of war activities which is slowly coming to an end. It has
moreover been observed that as the Covid relaxation in China have
eased down in the recent month, many of the trade activities have
started resuming pace again and in order to fulfill the pent up demand
they are increasing their production activities. The Indian MSME sector
accounts for nearly 40 % of India’s exports. MSME exports global
markets are slowly coming back to normal levels and MSME exporters
are operating at their highest levels of efficiency since the pandemic
crippled the global markets. This is very good for MSME exporters.