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MSMEs as the growth driver of India’s exports

In the wake of globalization, many things changed for Indian exports. A lot has changed from following the typical export procedures to carrying out the online processes smoothly. E-commerce has come as a significant growth driver in this space. As per the industry estimates by experts- E-commerce is expected to be the fastest-growing retail segment in India over the next 5-10 years, increasing its share of total retail from 3% to 10-15%. As a result, it is likely to play a more significant role in cross-border trade and business in India.

For instance, the Amazon global selling program running as an e-commerce export portal generates business worth billions of dollars. India’s cross-border e-commerce exports will surpass $1 billion in the coming two years. Handicrafts, home and linen, bedsheets, curtains, upholstery, and apparel are in high demand internationally.

Why businesses prefer Amazon?
The program assists the government’s vision, encouraging ‘Made in India’ products to go global and enabling over 50,000 Indian MSMEs to reach the doorsteps of 300 million or more global customers without having to leave their homes.

Due to its massive global footprint, unparalleled logistics infrastructure, and excellent customer service, Amazon Global Selling has become the most popular online marketplace for millions of customers. As a result, expanding the business across national borders has a lot of potential for profit.

India’s Global perspective can be huge over the next five years, and Amazon believes the Global Selling program will hit $5 billion in revenue by 2023, boosting the growth of lakhs of Indian manufacturers, exporters, and small businesses.

MSMEs and the Global Selling:
The government has been working to boost MSME exports as a percentage of total exports. It will help small businesses take advantage of cross-border trade opportunities, allowing them to grow exponentially and contribute to our economy’s growth. It is essential to remove barriers and make exports easier when millions of Indian businesses are recovering from the effects of an unprecedented pandemic.

However, the increased availability of the internet and technological advancements have transformed the exports industry in recent years. E-commerce exports have lowered the entry barrier to global markets for Indian MSMEs, allowing them to enter, experiment, and win. The programs like Amazon Global Selling have already provided much-needed support to the Indian Export landscape. For instance, an Ayurvedic supplement company would have never thought that selling directly to customers in the United Kingdom would be possible under a unified exports system.

Indian products are in high demand in global markets, ranging from traditional categories such as textiles to newer sectors such as toys, home and kitchen products, and much more. This demand has benefited thousands of Indian MSMEs, allowing them to carve out a niche. Most Importantly, these businesses contribute to creating jobs and the overall economy.

How do the Global Platforms help and contribute for the better?
E-commerce levels the playing field of MSMEs by enabling the various types of businesses to access international markets. This can happen in two ways: firstly, the companies can set up their websites, reach the customers and take and fulfill orders. However, this will become a lengthy process as the businesses will have to set up an altogether new line of operations. And secondly, companies can join e-commerce websites with a global presence. In this way, these businesses can benefit from the already lying company, regarding incoming customer traffic and infrastructure support.

Also, the business can focus on its core operations rather than putting time and effort into the setting up new platforms and creating a new consumer base.

Altogether, the programs like Amazon Global Selling have made things better! For instance, If an Indian MSME wanted to start an export business eight years ago, they had to make multiple efforts to identify the opportunities in the market, make visits to the potential global trade fairs, figure out logistics and shipping, know about the legalities and underlying process, and then reach out the consumers for taking orders. Finally, the businesses had to wait for payments when the sales were successful.

This process took months, and in the event that sales were not closed, the efforts went fatal. But, all of this lengthy process has been eliminated because of the efficiencies persisting in the Global System of selling. Thanks to e-commerce, all of this is now possible seamlessly.

The importance of micro, small, and medium-sized businesses (MSMEs) in driving export growth:
As India gradually moves toward economic self-sufficiency, the success of MSMEs and the sector’s contribution to exports will play a vital role in the Government of India’s vision for an “Atmanirbhar Bharat.” Many market players are already gaining access to the global landscape, thereby increasing their statute from the MSME bandwagon. With easier market access and seamless logistics, e-commerce platforms like Amazon Global Selling will be critical for India and the rest of the world.

E-commerce exports can help Indian companies establish a global presence for world-class products made in their own country. Besides, they will also bring much-needed support to the Indian economy, by helping lakhs of MSMEs export more quickly and affordably and bring local innovation and expertise to a broader audience. The creation of job opportunities and rising reliance on internet buying are the prime factors that can be counted in the list of benefits. The importance of micro, small, and medium-sized businesses (MSMEs) in driving export growth

Final thought:
Exports can play a critical role in economic revival following COVID-19. With the given size of our economy, our manufacturing prowess, the growing share of MSME contribution to the economy, increased internet usage, and the rapid pace of technology adoption, India can harness the opportunity in n a better way. What’s better is that we can use the technology and platforms like Amazon Global Selling to lower the barriers related to entry for millions of MSMEs across India who want to participate in export trades.

MSMEs now account for nearly half of India’s exports and contribute more than a third of the country’s GDP. The government has been working to boost MSME exports as a percentage of total exports. It will help small businesses take advantage of cross-border trade opportunities, allowing them to grow exponentially and contribute to our economy’s growth. The Hindu BusinessLine

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