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CRISIL has analysed the sales growth of 320 micro, small, and medium enterprise (MSME) exporters in five manufacturing sectors in 2011-12 (refers to financial year April 1 to March 31). These sectors (tabulated below) constituted 46 per cent of India's exports of principal commodities in the year, as per the data on merchandise exports released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S).
Even though India's export growth began moderating from the second half of 2011-12 owing to contraction in world trade and the economic slowdown, MSME exporters have posted double-digit growth across these five sectors. Interestingly, sales growth has been higher in sectors offering value-added products such as engineering and leather goods. Thus, the rupee depreciation alone could not have catalysed this impressive growth in revenue. In the long term, rupee depreciation can boost the competitiveness of MSME exporters in all five sectors, provided that supportive policy measures are introduced to encourage investments in technology and capacities (to gain scale), as well as to support diversification to non-traditional markets in Africa and South America.
Note: The analysis is based on the latest audited financial statements of CRISIL-rated MSMEs. Most enterprises finalise their audited financials by the end of the second quarter, after the closure of the financial year. CRISIL rates over 45,000 MSMEs in India. This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy.
