The Federation of Indian Micro and Small and Medium Enterprises (FISME) report suggests that there is ready potential in markets like tea, coffee, leather, marine, chemicals and dyes. The opportunities are not spread in all sectors but lie in specific product categories. Indian SMEs need to focus on these categories. Some other broad areas are tourism, information and communication technology, agriculture, construction, infrastructure, financial services, general manufacturing, mining, health sectors and education.

Indian SMEs especially have wide scope in countries like Sri Lanka, in specific sectors like IT, rubber, gems and jewelry, textiles and tourism. India did extremely well with ASEAN countries. India-ASEAN trade increased from $41.20 billion in 2009 to $48.70 billion in 2010. Major part of trade promotion is contributed by SMEs.

Bilateral business between Singapore and India expanded to 30 billion dollars. This happened due to easing of taxes under the ‘Comprehensive Economic Cooperation Agreement’. The Indian commerce and trade observers guarantee that Singapore can be a good springboard for the SME companies. The number of Indian SMEs is expected to increase 6,000 in next two to three years. Indian companies can exploit opportunities through joint ventures, technical tie-ups and collaboration.

Pakistan Chambers of Commerce and Industry (FPCCI) invited Indian delegation. Around 60 to 70 people will be visiting Pakistan next year. This will take place along side Anand Sharma – the Commerce Minister’s visit to Pakistan. SMEs remain the main focus as this sector contributes to the majority of trade between the two countries.

The chambers are focusing to improve co-operation in sectors like surgical instruments, textiles, pharmaceuticals, component manufacturing, automobiles, leather, light engineering, and agricultural products and so on. Major export items to Pakistan from India are cotton ($401.82 million) and sugar confectionery ($654 million). The current transactions and trade between India-Pak amounts to $2.7 billion and experts opine that 70 percent of it is contributed by SMEs alone.

FICCI and FPCCI understand that there is need to build confidence among business communities of India and Pak. If this can be done then the present $2.7 billion business can be doubled to $6 billion within a span of just 2 years. FICCI also supports an investment promotion and protection treaty.

India-Pakistan Chamber of Commerce and Industry (IPCCI) had already been formed in 1999 for promotion of trade co-operation. Now, the November Secretary-level talks can lead to an even greater tie-up in SME sector.

This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to info@biz2credit.com

The Kolkata based Linc Pen & Plastics Company has recently started a new wing named as the ‘Link Entertainment’ in collaboration with Bhatt’s Ipix Movies. The company’s owner is planning to produce low to mid budget films. ‘Shakal Pe Mat Ja’, a low-budget Hindi comedy, is its first film. This new movie is going to generate at-least 20% profit for the production house if it remains successful in the box office according to experts.

Council for Leather Exports (CLE), India and the Expo Riva Schuh Garda Fair- Italy have contributed greatly to organize the fair successfully. The B2B fair has seen participation from companies of Bangladesh, China, Italy and Thailand.

This is for the first time in India that an international fair of this magnitude in the leather and footwear industry is being held in India. The third day of ‘Expo Riva Schuh India’ saw 1,000 visitors and also generated significant business.

India is found to have an edge over China as there is easy access to skilled labor availability simultaneously coupled with the untapped potential that exists in the domestic market. China on the other hand is the world’s largest shoe-maker but then the country has lost out because of labor related issues.

Hopes Held High on the Trade Fair

The domestic footwear and leather industry sector will find an impetus with this B2B fair. India has already become a major hub for sourcing of shoes, leather, garments and finished goods. So, there is huge opportunity for domestic SME Units.

Ali Ahmed Khan, executive director at CLE, opines that the event is significant and marks a great beginning as in the first day itself huge number of people visited to grace the show. The domestic footwear market is noticing continual growth and evolution. This particular event will further catalyze the growth momentum.

In his meeting with Johann Schneider Ammann, head of Switzerland’s Federal Department of Economic Affairs, Sharma and Ammann have decided to conclude the deal between Switzerland and India. This is just the beginning as more countries are lined up . The other EFTA countries are Switzerland, Liechtenstein, Iceland and Norway.

Negotiations between India and EFTA started in January for a trade and investment agreement after the recommendations of a joint study group that got started in December 2006.

A spurt in number of people visiting stores and making enquiry about flag availability has increased. World Cup is sort of national festival and Khadi and Village Industries can expect to generate increased sale of flags, tattoos and mementoes during matches.

A manager at Kshetriya Punjab Khadi Mandal store says, "We keep a stock of Indian flags throughout the year. But the World Cup fever is on and it has increased the sales.”

Flags costs between Rs.175 to Rs.900 and they are made available at the Khadi Stores. The flags are hand spun and hand woven out of pure cotton Khadi cloth. They are made at places like Bangalore, Hoogly (near Kolkata), and Nanded Sahib (Maharashtra).

Villages like Burail and Attawa are also working to make the flags economical for people during the World Cup. Villagers are painting flags at homes and are making them available outside stadium on match days. Arrangements are also made for making tattoos and painting national flags on the bodies of fans. This is good earning for village based industries.

Prashant Jain, a diehard fan of cricket, says, “The Indian flag is one thing that says it all. It conveys all the good wishes and it also showcases the excitement that we feel while the Indian team plays its best.”

Manufacturers have started to make improved designs and have further added on ace colour and wool quality. Machinery has also been imported for the purpose. Majority of the units of this 1,000 crore industry are SMEs. Amritsar’s woolen industry employs 60,000 people and the city currently houses nearly 150-200 units. It employs both directly and indirectly.

According to the secretary of Shawl Club (India) Amritsar, Piara Lal Seth, Good monsoon, early winter and economic growth have proved to be an impetus for the increase in demand for shawls and stoles in both domestic and international markets. Indian Shawls are ‘international style statements’ now and this has led to unexpected boost in exports from Punjab. Growth in business in this current year is expected to be 15-20 per cent.

Shawl exports from places like Kullu, Srinagar, Amritsar, and Ludhiana have boosted. Foreign customers have also been drawn in as a result of presence of big departmental stores overseas. Younger generation in foreign countries finds stoles very attractive.

Amritsar alone is focusing on places like Europe, Australia, Japan, the US markets and the Middle East. Amritsar is estimated to export Rs 150-200 crore of shawls and stoles. This is a lion share of the total Rs 500-600 crore exports in this segment.

The Industry made a modest beginning with two shuttles-less looms and currently has 300 looms. There are also 1,500 traditional looms. Italian made shuttle-less electronic Jacquard looms are also present costing Rs 50-55 lakh each. This has helped to revolutionize work quality. Fabric made out of shuttle-less looms are of superior quality than that of traditional looms. Traditional looms costing around Rs 100,000 are still being used in large numbers.

Many units are planning expansion so as to meet the increasing demand. Many wish to import the new looms but it is the high customs duty of 19.75 per cent on shuttle-less looms that is hampering the growth. Moreover, fresh fund sanctions under Technology Up gradation Fund Scheme (TUFS) have been stalled till June 29th this year. Increase in price of raw materials like cotton, acrylic, polyester and viscose is also blurring bottom-line of shawl manufacturers.

Devamany told about this to media-persons and then went on to meet members of ‘Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry’ (KLCICCI). According to Devamany, Indians are in need of more help that would enable them improve upon their living standards and at the same time compete with others in the business world.

The National Key Economic Areas (NKEA) will further see the establishment of similar labs and for this reason talks are on with the Performance Management and Delivery Unit (PEMANDU). Devamany is also quoted as saying, “We are now working on the retail industry because Indians are still running their businesses the traditional way and need to modernize their outlets to compete with others.”

It is also being highlighted by Devamany that Indians should venture more into SMEs. The establishment of the labs would also help to reduce crime rate among the Indian Youth.

This 20% reservation will be implemented over next three years in a phased manner. However, the small entrepreneurs are disappointed as the government procurement till now has been just 4 to 5 percent of the total purchases for MSMEs. A source said that initially some ministries were apprehensive about the quality and quantity. But things have been settled now. The revised order is a consequence of the ‘MSME task force’ that has been constituted by the Prime Minister.

The PPP has been recommended by the task force. It mandates ministries and PSUs to make 20 % of purchases from MSMEs. In the annual procurement, the current share of MSME is Rs 1.07 lakh crore. The move is being welcome by the small industry. Small entrepreneurs will reap the benefits from the policy as now their products will be purchased by PSUs.

Mounting pressure is increasing on manufacturers due to the rising raw material costs. This is being intimidated by Jayakumar Ramdass, president Southern India Engineering Manufacturers’ Association (SIEMA). Copper price, the major raw material for pump makers, has increased from $7,300 to $9,000. A 15 % rise in prices of raw materials like steel, stainless steel and bronze is also witnessed.

The industry has to increase the prices of pump by 7.5 percent in order to compensate for price of copper. Ramdass, managing director of Mahendra Pumps, says, “Overall, we need to increase prices by 15 per cent, but we could increase them by only 10 per cent. Though the top-line is good, the bottom line is bad.” The current industry size is of Rs 4,000 crore and just 10 companies’ lead to sales of Rs 3,000 crore.

Exports encompass 10 percent of industry’s total sale revenues. Exports take place in United Arab Emirates, Europe, East Europe and countries on the Indian subcontinent. Bigger companies can withstand erosion in margins while the smaller companies are unable to. In Coimbatore itself 600 smaller units got reduced to 300-350. And 100 units that were manufacturers of own brands became suppliers of bigger brands. But then bigger companies are also investing Rs 200 crore so as to expand capacity.