'MSMEs face stiff competition from China'

Indian MSMEs are also facing challenges like inadequate exposure to world market and low capital base

Micro, small and medium enterprises (MSMEs) in India are facing stiff competition from China, the government has conceded.

As per information compiled by the Director General of Commercial Intelligence & Statistics in respect of eight major product groups largely manufactured by small-scale industries in India, imports from China grew at a higher rate than their respective imports from all countries combined between 2008-09 and 2011-12.

These eight product groups - which include electrical and electronics; mechanical and metallurgical products; chemical and glass and ceramics-based products - accounted for 54 per cent of India's total imports from China in 2011-12. A significant proportion of small enterprises are seen to be facing greater competition from China as compared to that from the rest of the world.

"Strong competition from China faced by Indian MSMEs is evident in the high growth of India's imports from China," Minister of State (Independent Charge) for MSME K H Muniappa has said in a written reply to the Lok Sabha.

In addition, MSMEs in the country are also facing challenges like inadequate exposure to the international market and a low capital base. However, the government is implementing various schemes to overcome the challenges to the growth of MSMEs, the minister said.

The gross budgetary support for the Twelfth Plan (2012-17) of the Ministry of MSME has been approved at Rs 24,124 crore by the Planning Commission. These schemes and programmes help MSMEs grow, increase their competitiveness and consequently their exports, he said.

For export promotion in particular, the ministry is implementing the Market Development Assistance Scheme, as also various other export promotion schemes through its autonomous bodies, namely the National Small Industries Corporation (NSIC), Khadi and Village Industries Corporation (KVIC) and the Coir Board.