Trade, import and export for MSMEs: For India to benefit from the relocation of factories and companies from China, the MSME sector is likely to play a key role. This is particularly for food product manufacturing sector where India lacks competitiveness in exports.
Trade, import and export for MSMEs: For India to benefit from the relocation of factories and companies from China, the MSME sector is likely to play a key role. This is particularly for food product manufacturing sector where India lacks competitiveness in exports and hence, the government can give it a direct push for its MSMEs to benefit, SBI said in its latest Ecowrap report on Thursday. This is because India has a greater Revealed Comparative Advantage (RCA) than China in the overall consumer goods sector. Within the sector, “although we do have a comparative advantage in textiles and animal goods, in food products we are not competitive,” it said. RCA is an index for indicating the advantage or disadvantage of a particular country in certain goods or services type by looking at trade flows.
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MSMEs have the biggest concentration of 17.30 per cent is in textile and clothing vertical while 12.30 per cent is food products market and 10 per cent in crop and animal goods production markets. India can target incremental exports growth by $20 billion in the least favourable out-come to a significant $193 billion increase in the five-year period, only if it builds its capabilities and captures share from China, the report said. India has a “very small manufacturing base as compared to China” and hence it would require “significant push both in terms of strategic relations and structural reforms” by the government.
Source: Financial Express
