Exhibitions and Business Events Blog

The World Bank has agreed to release US$400 million new financing loan to the Small Industries Development Bank of India (SIDBI), in an endeavour to further strenghten the growth of Small and Medium Enterprises (SMEs). This additional financing will add to the already disbursed original project which had been fixed by the World Bank on November 30, 2004.

Indian SMEs face constant challenges when it comes to obtaining finance on competitive terms, especially in case of longer term loans. This problem got further heightened by the current economic slowdown, leading to liquidity crises and the dawdling credit growth in the Indian Financial sector. SMEs, in particular were severely affected by the credit decline last year that impacted the overall growth and development.

"This Project is part of a larger program of support in response to the Government of India request for funding in light of the financial crisis. It is targeted particularly at SMEs, to help address the credit slowdown that has resulted from the financial crisis,” said Roberto Zagha, World Bank Country Director for India. “Achieving and sustaining growth and employment will require a sharp step up in industrial and services growth. This needs to be spurred by SMEs which have the greatest potential to provide employment.”

The credit facility available through the project will help finance long-term and working capital loans for SMEs in areas that were previously left uncovered in the original project. The new areas, probably means less developed states, and this change in standpoint will help particularly promote overall economic growth.

Refinancing of other financial institutions and banks who on-lend to SMEs are also on the cards. The project had earlier covered 927 SMEs spread across 10 Indian states. In fact, a survey revealed that around two-thirds of the SMEs financed under this project, fine-tuned their technology, which helped them enhance productivity.

The loan, from the International Bank for Reconstruction and Development (IBRD), is supported by a Republic of India guarantee. The maturity period is of 15 years which includes a 5-year grace period.

Description: Due to global economic slowdown Indian Small and Medium Enterprises (SMEs) will receive additional funding from the World Bank to the tune of US$400 million.

You cannot bury the past, they say. It always claws its way back. That explains India’s rising status as second best economy in the world. For more reasons than one, the golden bird is all set to fly again. Made in India is the mantra of the modern times.

Skeptics (read: China) fail to understand why India is shining, while scores of countries adopting similar economy propelling practices have failed to prosper. No one knows the reason why, but world’s attention has undoubtedly shifted to India, as sunflowers turning to the sun.

The pace with which India is establishing world-class companies has also baffled our neighbours (China), whose corporate makeup is based on state-owned and foreign companies.

Now coming back to the past, India was known as the golden bird-world’s wealthiest nations. Every Indian had plenty to eat; trade was thriving, riches unbounded. Enamoured by India’s glowing riches, the Mughals, the Europeans and the British came calling and together they plucked bare the golden bird. And finally when India could manage to throw out the British, it was already cold and bare, riddled with illiteracy, poverty and mounting debts.

Today, however, if we look back, it is highly felt, the caste system which India has been practicing since time immemorial has come handy in the resurgence of world’s biggest democracy. The Vaishyas, of course, members of the merchant caste, who over the years have the learnt the ropes of accumulating capital, has apparently endowed the nation with a competitive edge. Commerce is a natural trait they say and it helps if you have a committed group of risk-taking entrepreneurs who knows how to make most of the opportunity. In fact, today Vaishyas lead the Forbes list of Indian billionaires.

Little wonder, India is gaining back its lost glory. Once again India has become the epi-centre for all trading activities. In other words, India has become a big mart. Backed by expanding middle class, higher disposable incomes and proactive government policies have come together to propel India into the top league. Goods manufactured in India have global demans.

In fact, India gives global business houses an excellent opportunity to buy quality goods at extremely competitive prices and that to in a healthy business climate. The economic policies, coupled with flexible regulatory environment and taxation system has inspired foreigners to flock Indian shores for Indian made products. Special attention is also given to the Industry-related logistical issues.

Why global business houses looking forward for India made goods?

Valid question. Those seeking to source India goods will want to make themselves familiar with circumstances which will help them in easy sourcing. The following points will answer all your queries.

• Counted among the top 10 economies of the world

• Massive manufacturing base, including aircraft, locomotives, ships, cars, power plants, capital machinery, chemicals, consumer electronics, textiles and food products.

• Dream destination in the world in terms of low-cost, high-value software services and R&D

• Largest congregation of English speaking educated workforce in Asia

• Second largest railway network in the world, coupled with vast coastline and sea ports

• A free market economy with latest legal, financial systems and a free press/media

• Business and cultural associations with neighboring countries like Bangladesh, Sri Lanka, and Nepal that provides a proactive platform for sourcing from them as well.

• Abundance of high-skilled, low-cost base of labour, having long-term sustainability.

• Foreign counterparts are seen more as partners in fostering domestic manufacturing capabilities rather than a threat to Indian businesses.

India was a popular trade mart in the ancient times. The word ‘trade’ danced on the lips of many Indians. In fact, Indian trade was the cause of envy for many foreigners. As roman writer Pliny (AD 23-79) for instance, wrote about the cost of the luxury commodities that were imported from India. "Not a year passed in which India did not take fifty million sesterces away from Rome", wrote Pliny.

But surprisingly the growth got stunted in the face of Europe’s monopolization of India’s external trade, colonization and unjust trade practices, literally robbing India of its good fortunes. The downturn most probably started after the 18th century and India was hurtled to the bottom heap.

Interestingly, since pre-independence India has aggressively built upon its economic system. Driven by proactive government policies, strong, low-cost, highly educated work force, India is back with a bang, riding the wave of economic prosperity. Indian made goods have started gaining global acceptance, given its quality and competitive price. From a ‘developing nation’, India, today, has surfaced as one of the decisive nations, drawing the blueprints of the world economy.

Backed by skilled manufacturers, several of the major sectors are up and running and have formed a fundamental part of Indian Export basket. The significant sectors that could be called as the face of Indian Exports include:

Agricultural Sector: Today, India ranks second in the wider world in the farm output; Agricultural sector has been the undeniable highlight of India’s exports. Indian goods that are hugely popular in international markets include, Sugar, Tea, Spices, Wheat, Rice, Tobacco, etc.

Achievements of Indian Agriculture:

• India is the largest producer and mart of Wheat in the world

• India is the biggest producer and mart of Cotton in the world

• India is the largest producer and mart of Milk in the world

• India is the largest producer and mart of Tea in the world

• India is among the largest vegetable oil economies in the world

• India is the largest producer and mart of Rice in the world

• India is the second largest producer and mart of Fruits in the world

• India is the largest producer and mart of Coffee in the world

Textile and Apparel Sector: With a wide array of fabrics and immensely skilled manpower, Indian textile and apparel industry has been driving the global supply chain. Indian fabrics and workers are making their presence felt in Bangladesh, Sri Lanka and other countries. Indian exporters are intending to go beyond the markets of United States and Europe, and planning to explore new markets like Japan and non-traditional products like those made from organic cotton which command premium in international market.

Chemical Industry

In the early 1990s, India as a big mart, was a net importer of chemicals. Now has become a net exporter after many large scale petrochemical plants like Reliance, came into existence. Also, significant growth of exports in segments like bulk drugs, pharma pesticides, dyes and intermediaries have contributed to its exports. In 2007-08, Indian chemical export to EU market was valued at around 27 billion INR as compared to 23 billion INR in 2006 – 2007

Home Furnishing goods –

Riding on the back of Innovative designs and deft craftsmanship, Indian home furnishing industry has being creating ripples on the global radar. Also, seasoned artisans, modern manufacturing facilities, state-of-the-art machinery and design equipment has helped India capture the international markets on the home furnishings and textile industry front. In fact, Indian made floor coverings; kitchen linen, and bathe linen, cushion covers, bed sheet, curtains have become a rage in the international markets. Floor coverings such as carpets, ‘durries’, druggets, prayer rugs, hooked rugs, ‘namdas’ Made in India are also catching up, like never before.

Indian Jewelry - India is a big mart and known as the diamond destination. Today, nearly 9 out of 10 diamonds sold world over are cut and polished in India. But now, with 100 per cent Foreign Direct Investment (FDI) permitted in gems and jewelry through the automatic route, India is a big mart on the threshold of becoming the focus point of the global gems and jewelry industry. Hand-made ethnic jewelry crafted by Indian artisans has massive demand in various countries with significant Indian immigrant population like the Middle-East, South-East Asian countries, USA, Canada and so on. The non-ethnic jewelry, generated on machine is also in great demand in foreign countries.