'FTP needs to provide insurance to MSME exporters'

'FTP needs to provide insurance to MSME exporters'

FTP must include trade finance, insurance provisions for MSME exporters. (Image for Representation)

The new foreign trade policy needs to focus on providing easy access to trade finance and insurance to MSME exporters which contribute significantly to the country's outbound shipments, trade experts said on Friday.

They also stressed on holding programmes and workshops for MSME exporters in small cities and towns to increase awareness about government policies and various export sops.

The government is likely to come out with the foreign trade policy that provides guidelines and incentives for exports for the 2020-25 period by the end of next month or early October.

Pawan Gupta, the founder & CEO of trade facilitating portal Connect2India.com said, "The new foreign trade policy should include provisions for reference finance and insurance for these exporters as these issues are crucial for them."

He added that exporters in tier-II and tier-III cities are not aware of government policies and are not able to avail benefits out of those.

“MSMEs are the lifeline of the Indian economy and a key contributor in global trade. Despite playing a pivotal role in the overall economic development of the country, this sector grapples with access to trade finance often restricting the reach to global markets" Gupta said.

For MSMEs, the gap in trade finance could mean missing out on a lot of global business opportunities, he said.

"Access to trade finance would allow SMEs to execute large quantities recurring orders," Gupta said while highlighting a service launched by them to help exporters access finance from partner financial entities.

Sharing similar views, Ludhiana-based engineering exporter S C Ralhan said that the new policy should include a scheme for a refund of state levies.

In the current international scenario for trade, it is important for the government to take targeted steps to boost exports.

There is also a need to start workshops and programmes to increase awareness about government policies in smaller towns for MSME exporters, experts said.

The new FTP is coming at a time when Indian exporters are facing headwinds mainly due to trade tensions between the US and China.

Outward shipments declined by 9.71 per cent to USD 25.01 billion in June, the first drop in eight months, due to the US-China trade tensions.

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