Kotak Mahindra Bank's Manish Kothari thinks Govt should set up promotion councils to help MSMEs go overseas

Manish Kothari, President and Head – Commercial Banking, Kotak Mahindra Bank Ltd

“Considering MSMEs contribute approx. 45-50% to India's exports, some specific measures to support this segment will be key to build our exports. Things like, 1) Widening the scope of interest equalisation subsidy or remission of specific duties/taxes for this segment; 2) Setting up promotion councils to help them go overseas for marketing or managing trademarks, patents, compliances, etc.; and 3) In general, investing in developing export logistic infrastructure and expanding the FTAs to more nations should help the cause. Additionally, to expand bank credit to this segment, especially for Micro Enterprises (where thin credit information and higher cost to serve for banks is an issue), the Govt can look to bring support through some credit guarantee scheme (maybe similar to ECLGS) or a separate subsidy/priority status for this segment of customers (maybe similar to the support extended to small & marginal farmers). A separate Credit Rating and attendant risk-weight framework for the MSME segment could also help differentiate and support them in a better way."