Export promotion: Mkt access schemes need to be backed by coherent strategy

The Union government’s ₹4,531 crore Market Access Support (Mas) scheme is a welcome step, particularly at a time when exporters are facing slowing global demand and disruption in key markets such as the United States (US). Its emphasis on buyer-seller meetings, trade fairs, reverse buyer delegations, and market diversification reflects an understanding that helping firms discover new markets, build visibility, and diversify from tariff-hit geographies is necessary. The scheme’s explicit bias towards micro, small, and medium enterprises (MSMEs) is especially notable. However, an Exim Bank report shows that only about 1 per cent of MSMEs registered on the Udyam portal are exporting. Lack of information on overseas opportunities, weak buyer relationships, marketing challenges, and credit gaps remain binding constraints. In this regard, a mandatory minimum participation of 35 per cent of MSMEs in supported events lowers entry barriers and addresses a long-standing imbalance in export promotion that has favoured larger firms. But this is not sufficient. The Mas scheme does well to address the demand side of exports, that is, market discovery, networking, and promotion. What it cannot resolve are the structural supply-side constraints that are eroding India’s export competitiveness.

 

It is increasingly evident that exporters’ difficulties go beyond tariffs and anti-dumping or countervailing duties imposed over and above tariffs. The government’s own reported responses to a Right to Information (RTI) application reveal that the high cost of domestic inputs and energy prices, the costs being 15-20 per cent above global levels, remains a concern. Multiple states have flagged the absence of accredited labs, forcing exporters to send samples across states, adding cost, time, and uncertainties. Logistics bottlenecks further undermine the gains from market access. Container shortages, high freight rates, and levies on empty containers, particularly for landlocked states, directly hit competitiveness. Here, Mas needs to be complemented by measures that address freight pricing, container availability, and inland connectivity. Regulatory friction compounds these challenges. Exporters have raised concerns about norms of the Bureau of Indian Standards being applied even when destination markets follow different standards, adding compliance costs without clear benefits. In such an environment, facilitating participation in overseas fairs risks becoming an exercise in marketing products that are already priced out of competition.

 

While the government deserves credit for sustained engagement with exporters and industry bodies, these consultations have largely focused on operational grievances rather than their being fed into a coherent, forward-looking export strategy. Further, schemes like the “Remission of Duties and Taxes on Exported Products” and “Rebate of State and Central Taxes and Levies”, introduced to support exporters compliant with regulations of the World Trade Organization, are temporary and are extended for a few months at a time, often with last-minute notifications. Such temporary measures detract from policy stability and erode confidence. Seen against this backdrop, Mas risks becoming an enabling add-on rather than being a tool for enhancing competitiveness. To achieve export resilience, the policy response must be layered. Market access support should run alongside cheaper and more reliable inputs, lower energy costs, adequate testing infrastructure, smoother logistics, and regulatory alignment with destination markets.