Exim Bank’s study, based on a primary survey and secondary research, identifies the challenges that affect MSMEs’ participation in exports, including lack of information on export opportunities, lack of relationship with foreign distributors, agents and customers; marketing related challenges, lack of awareness about financial support/schemes for exports, and challenges in complying with regulations in export markets, among others.
The study highlights the pivotal role of MSMEs in India’s economic output and exports. Data from DGCI&S, that utilises the Udyam and IEC status of Indian MSMEs, indicates that direct exports by MSMEs reached US$ 127.6 billion during 2023-24, accounting for about 29.2% of India’s merchandise exports during the year. This excludes indirect exports through merchant traders who source products from MSMEs. Accordingly, overall contribution of MSMEs to exports, including direct and indirect exports, is likely to be higher. As per the Ministry of MSME, Government of India (GOI), the share of exports of select MSME-related products in India’s merchandise exports was 43.6% during 2022-23.
Recognising that finance is a critical factor for enhancing MSMEs’ competitiveness, the study examines the scenario of MSME financing in India. The study finds that credit flows to MSMEs have shown a steady growth, with total credit flows to the sector by all financial institutions estimated at ₹27.8 lakh crore, as of end-March 2023. Scheduled Commercial Banks (SCBs) accounted for the largest share of credit flows to the sector. During 2020-21 to 2022-23, credit disbursements to MSMEs by SCBs recorded a robust CAGR of 24.1%. NBFCs and other financial institutions, alongside platforms like the TReDS, serve to diversify the sources of financing for meeting the needs of MSMEs.
Analysis in the study highlights that only 1% of Udyam-registered MSMEs are currently exporting. For enhancing the export-participation of MSMEs, the study suggests a holistic approach targeted at supporting marketing efforts, bridging financing gaps, bolstering export capacity (including technological advancement), strengthening of support programmes and institutions, and promoting innovative modes such as e-commerce. The study emphasises that unlocking the potential of MSMEs through these multi-faceted interventions will be crucial for achieving the Government of India’s ambitious target of US$ 2 trillion in exports by 2030.
The Study titled ‘Promoting Exports from the MSME Sector’ was released by Shri M. Nagaraju, Secretary, Department of Financial Services, Government of India, during an event jointly organised by Exim Bank and the Asian Development Bank (ADB), titled “Seminar on Business Opportunities with the Asian Development Bank”, on April 30, 2025, in New Delhi.
The event had speakers from the Government, public sector enterprises, banks, financial institutions, academia, think-tanks and NGOs. The event was attended by more than 100 participants. During the event, representatives from Exim Bank and the ADB provided information on opportunities in ADB-funded projects in diverse sectors, ADB Procurement Procedures, ADB Consultant Recruitment Procedures, opportunities under the GOI-supported Exim Bank’s Lines of Credit programme, and Exim Bank’s financing programmes.