Nearly 40% Indian engineering exports driven by SMEs, says EEPC India

Indian SMEs are responsible for about 35-40% engineering exports, said Aman Chadha, chairman of EEPC India.
 

He also threw light on the poor conditions of the engineering players in India and also stressed on the importance of government initiatives to strengthen the presence of these firms at the global level.

 

 

 

What is the role that EEPC India aims to play in India's SME sector?
 

Aman Chadha:  60% of EEPC India’s constituents belong to the MSME sector, which is what the SME is called after the 2006 amendment. Hence, our activities are tailor made for the development of the MSME engineering sector of the country. We suggest progressive policy measures to the government, promote MSME products in exhibitions abroad, hold a wide range of developmental activities to enable our members to gather information on market developments, quality standards, regional trade agreements, publish various journals and information materials for both MSME as well as all our members so that India’s engineering industry and its exports thrive.

 

 

What are the current projects being undertaken by EEPC India?
 

Aman Chadha: EEPC India is participating in about 30 to 35 specific engineering exhibitions all over the world. These exhibitions cater to the 34 engineering segments that we cater to and directly benefit the MSME units belonging to these segments. This apart, we hosted over 80 companies at an India Show in Tokyo, Japan in June 2012 and will follow it up with another India Show at Brno, Czech Republic in September 2012. Over 120 companies are expected to participate at the September show.

 

 

In March 2012, we hosted the India Engineering Sourcing Show (IESS 2012) at Mumbai. This was a grand success and we will follow this up with the second edition of IESS, the IESS 2013 in March 2013, again at the Bombay Exhibition Centre, Mumbai.

 

 

How do you think that the Indian SMEs are performing in the engineering sector?
 

Aman Chadha: India’s SMEs account for about 45% of production and between 35 to 40% of engineering exports. Hence, they are an important component for the future progress of the engineering sector. Our focus is towards technological upgradation of the sector, enhancement of innovation at the work place and the ability to move up the value chain.

 

 

India's engineering exports declined by 10 per cent to $27.81 billion in the first half of the current fiscal. What’s your take on it?
 

Aman Chadha: We must remember that we are now globally integrated and hence if the rest of world, especially, the major markets, are facing acute recession, the impact is likely to be felt on our exports, particularly, engineering exports. So these are on expected lines. I also notice that our exports are suffering in regions like West Asia as also rest of Asia. It is quite possible that turmoil in West Asia is affecting our exports while we need to analysis the data for rest of Asia more closely.

 

 

What are the key challenges faced by the Indian SME sector?
 

Aman Chadha: There are two critical challenges - how to combat technological obsolescence by upgrading technology and access to credit, given the high cost of credit, be it for short term requirements, long term or export purposes.

 

 

Do you feel that government policies (both Centre and state) are working in favour of the SMEs? Are they assisting these companies in alleviating the pertinent issues?
 

Aman Chadha: Given the wide dimensions and problems of the sector, we do believe that some more supportive measures, particularly, with respect to technology upgradation,  affordable credit structures, stable raw material prices and more promotional avenues abroad, can be taken both at the central and state levels.

 

 

What is the outlook for the SME sector in this year?
 

Aman Chadha: Well, as of now things are in the tough phase and hopefully we could be moving up the curve soon.

 

 

In the past, global ratings agencies have cut the outlook for India to negative. Do you think it will impact Indian MSMEs?
 

Aman Chadha: Let me say this that if look around the world, these credit rating agencies will need to downgrade every country, given that we are in the midst of a sharp slowdown. There is certainly a herd mentality among the rating agencies.

 

RBI's move to leave rates unchanged in the monetary policy review has been criticised by India Inc. How do you think it will impact the growth of SMEs?
 

Aman Chadha: I have already raised the issue of high cost as well the lack of access of credit for MSME units, particularly, the tiny units. So the high base rates will hamper the ability of MSMEs to invest, firm up working capital as well as export.

 

 

Kindly share the roadmap of EEPC for the ongoing financial year 2012-13.
 

Aman Chadha: As I mentioned, EEPC India will be participating in about 30 to 35 specific engineering exhibitions all over the world. We also hosted over 80 companies at an India Show in Tokyo, Japan in June 2012 followed by another India Show at Brno, Czech Republic in September 2012. This will be followed by the second edition of IESS, the IESS 2013, in March 2013, again at the Bombay Exhibition Centre, Mumbai.