India’s exports for April 2017 jumped nearly 20 per cent in dollar terms over exports during April 2016. This is particularly heartening when export figures were showing a decline over the last 24 months.
Medium and small scale exporters have a near 40 per cent share in total merchandise exports. These exporters have a leading role in exports of readymade garments, leather and footwear and gems and jewelry, which are important contributors in India’s export basket.
Exports from India have gone down in secular terms from 2013 to 2016 and between 2014 and 2016 the drop in exports was more than 17 per cent in dollar terms. Exports of readymade garments have nearly stagnated between 2015 and 2016.
For leather and leather products, another sector dominated by small and medium enterprises, there was a drop in exports during the last two calendar years. The story is identical for labor intensive small and medium sector of gems and jewelry which has a 15 per cent share in India’s export basket.
An increase in credit offtake is a natural corollary to the growth in any economic activities as enterprises, particularly small and medium enterprises, cannot maintain a cash chest ready for use for increasing manufacturing as per market demand.