EDITION VII

COLLABORATE TO INNOVATE

THE THREE MUSKETEERS, IIFT

AVINASH JHA PIYUSH KUMAR SRIMOYEE BHATTACHARYA

INTRODUCTION

1 2 3 4

% of GDP Rural

Contribution Large Employer Export Potential

contributing around

30% for the

past 5 years

51% of MSME are

in Rural areas

Employees 12 Crore

people

40% in India’s

total exports

Impact of MSME Sector on Economy

Scope of the Current Analysis

03 Coir industry too has huge potential with India being its largest producer

01 Food and Beverage has the largest share in MSME with 15.77% contribution in employment and16.15% in exports

02 Apparel is

close second generating

9.68% employment

and 6.30% exports

Potential of e-Commerce Export and

Hindrances

Bandwidth and Network

Restrictions

Lack of availability skilled

work force

Privacy and security

concerns

$26 Billion Export

Potential

$2 Billion achievable

by 2020

Source: www.financialexpress.com

Limited and few irrelevant sectors under MEIS policy

Duty Credit of 3% can be availed to the maximum extent of Rs.

25000 only

Some Policy Bottlenecks

Limited airports for courier clearance under manual mode

APPAREL INDUSTRY

Handloom

Powerloom

Export : 15% +ve BOT : $7K crore

China, Bangladesh,

Vietnam

Export destinations

USA, UAE, Pacific,

Bangladesh, Germany,

East Asia, Middle East Export : 60%

Handloom sector

Varanasi

Sivasagar

Virudhunagar

Murshidabad

4

Handloom

clusters

in

India Po

lic

ies

Po

rt / T

ran

sp

ort

Infrastructure/IT

readiness

SEZs

SEZ facilities

• Falta(textile) SEZ

can be used for

exports

• Textile Parks(under

SITP) in and around

Phulia, Nabadwip,

Baharampur and

Sriniketan

Ports/ connectivity

• India Post to be

revamped for

delivery

• NH12 to be used for

inland transport from

Haldia ICD

• Haldia port for water

connectivity to

Kolkata port (KPT)

Policies

• Policies for financial

inclusion

• Budget allocation

• GIs for boosting

trade

• All India handloom

brand to be

modernised

Literacy( IT )

• Handloom mark

education for weavers’

cooperatives

• Network neutrality

• Implementation of

digital single window

system

Source: Source : ministryoftextiles.gov.in

Shantipur Handloom

Cluster

APPAREL INDUSTRY

Bhiwandi

• Improper

utilization of TUF scheme

• Lack of Govt. support

• Transport issues

• Price spikes in raw material

• Obsolete

technology • Poor

transport facilities

• Lack of textile parks

• Lack of financial inclusion

• Mahajans as middlemen

• Taxation

issues • Reverse

charge mechanism

• Unskilled labour

• Electricity issues

• Heavy duty • Power and

distribution cost

• Tax system • Logistics • Prices of

the yarn • Power cuts

Erode Malegaon Bhilwara Palladam

• Non

Availability of yarn

• Exploited by yarn merchants

• Excise duties

• Govt. Policies

• New tariff of electric charges by MSEB

Major Powerloom Clusters in India

Formation of SHGs and cooperatives

Piggybacking on local brands

Formation of textile parks and logistic hub

Revoking monopoly on community base

Exemption on tariffs on electricity

Government intervention

• Abolition of the

middlemen system

(atleast 5-6 mediators)

• VMI of yarns for

transparency

• Technology upgrades

SEZs/ Ports and transport

• Formation of textile parks

to boost exports

• Formation of textile SEZs

around Nashik

• Logistics hubs

• Charter services and

international warehousing

• NH3 for inland roadways

Source : Shodhganga reports and textile ministry portal

Source: Source : Shodhganga reports and textile ministry portal

01 02 03 04

EXPORT

COMPETITION

OBSOLETE

PRODUCTION

METHOD

FINANCIAL

CRUNCH

LACK OF

MARKETING

Cheap Exports from

Sri Lanka and

Philippines

Short fiber resulting

in excessive

shedding

Responsible for 50%

sickness in Coir

Industry

Lack of Product

awareness,

standardization

COIR INDUSTRY

And its Problems

GI Tag to

Alleppey Coir Pain Points

No FTP Covered Airport in Vicinity

Lack of CBT Return policy

1

Immediate Action Required

2 Lack of MEIS Coverage

3

Source: MSME Annual Report 2017-18

COIR INDUSTRY

Recommended Efforts

Cooperative

Societies

Centralized

Product

Specific

Warehouse

Renewable

Energy

Integration

Infrastructure Logistics

Policy Technology

Uniform

International

Standard

Online Portal connecting

Buyers and Sellers

Value Addition through state of the art

equipment E-clusters for better product

tracking

R&D for product diversification

Dedicated

Export

Corridor for

Finished

Goods

Creation of

Common

Facility Centers

Non- Restrictive

Government

Regulations in

Logistics pertaining to

Coir Sector

Public

Private Logistic

Integration

Declaration of Major Towns as

Towns of Export excellence

Incentive through Husk bank improve

the utilization percentages of husks

Increasing the De Minimus Threshold to

help reduce time and cost in CBT

Source: Enhancing the Export Competitiveness of Indian MSMEs through Online Retail

Platform: A contribution towards promoting “Make in India” globally through online mode

FOOD AND BEVERAGES

INDUSTRY

Apples

Commodities

Trading

Exchange

NCDEX, for

example Mandis

MSMEs Price Setters

eCommerce

Traditional

MSMEs will mostly develop in

the areas where Mandi for that

crop is established, e.g.

Kinnnaur for Apples, selling

Value Added crops (Apple

Juice) or grains. Other MSMEs

can ship their produce to these

mandi warehouses

Pricing

This will be/can be decided by

exchange. Importers will either buy

from commodity exchange or

MSME, whichever is lower

Revamping the Business Model, before

exports:

a) Stares are gradually moving from

APMC model to APLM model:

Presently, farmers can sell their produce

at regulated APMC mandis only.

b) Beneficiaries are Farmers – they will be

in a better position to discover price,

Corporates – by getting the best price

(through contract farming) and MSMEs

How will MSMEs benefit from

this?

a) Directly buying from farmers will

give them the best price

a) Increase in MSMEs in this

domain will result in competitive

prices of processed products

(crops, dairy produce, etc.) by

MSMEs and thus can export at

better prices

In non APMC states

1. MSMEs will procure crops from farmers

2. It will add value by processing it into specific products such as

making:

a. Wheat Flour

b. Juices from fruits such as Grapes, Apples (HPMC)

c. Pasteurized Milk (in different SKUs like Tetra packs, Packets)

d. Milk Products like flavored milk

e. Fresh meat, etc.

3. It will be economical in scale, and economical in price. Its price

will be more competitive in the export market as compared to private

players

4. Marketing as well as Branding will be done by Government,

establishing the trust of Indian brand

5. Ministry of MSME will regulate the process, appropriate pricing will

be done by the Government (on the basis of exchange), and

appropriate share will be distributed between the stakeholders

Processed

Crops

Processed

Beverages

Processed Meat

Dairy Produce

Pro

du

cts

co

nsid

ere

d in

th

e

ind

ustr

y

Proposed Policy:

With APLM, there will be single Agri-market

where with single license one can trade

Agri-produce as well as livestock

Incoterm used by eCommerce: Most B2C

transactions will use CPT/CIF (and

sometimes DDP): buyer to pay all tariffs and

taxes upon arrival; MSMEs can come in a

contract wherein import duties can be

exempted in case of reverse logistics

Necessary to find a workaround on delay

in the Transport Assistance Scheme

(APEDA), affecting the working capital cycle

Necessary to procure the produce from

registered farmers only, to comply with the

norms of importing nations

Proposed Infrastructure Developments in MSMEs:

Exports, predominantly has a greater lead time,

perishability is a major issue

Crops

• Technologies like Varietal Profile Match,

Nutrient Value Calculator, Smart Labelling,

can be used by MSMEs to better track their

shipment and ensure quality and timely

delivery

• No Central Perishable Cargo/Vacuum

Cooling Facility for offloading the perishable

items. 3PL/Freight Forwarders MSMEs can

look onto the same

Poultry and Sea Food

Handheld GPS to obtain spatial information, Bio

Sensors (for eggs) and Geospatial technology

will help MSMEs to have current information

Processed Foods and Dairy Products

Improved Packaging materials, Quality

prediction models - accurate prediction about the

remaining shelf life

After Sales: Reverse Logistics is difficult to use

as the quality of food is already degraded by the

time it is exported

Proposed Logistics Developments in MSMEs:

In case of poultry products and fruits/vegetables,

• Usage of cold chains to reduce wastage due

to perishability

• Different compartments in the infra for dairy

products, poultry, etc.

• Usage of QR code like RFID which

continuously provides the data about the

quality and freshness of the perishable items

• Logistics: Automation of supply chain process

from procurement to delivery

• Use of inland waterways to ship cargo to

destinations (using Ganges, IWAI), reducing

costs

• Volatile freight rates in the peak season is an

issue. Freight hedging by MSMEs is an

essential solution that it needs to consider

Although demand forecasting can be extensively

done through IoT Analytics and commodity

trading firms, inventory management has to be

sturdy

• At Warehouse: Using Cobots, collaborative

robots to work alongside human workers

India is the second largest producer of fruits and vegetables globally. The share of processable varieties is minimal, still.

DAHDF regulates milk and dairy product

export to India. Sanitary Import Permits

needs to be thoroughly implemented at

the ground level for attaining import

standards

FOOD AND BEVERAGE

INDUSTRY: Recommended Efforts

Regional brands to

be created like each

for each regional

MSME textile houses

‘Ikat Chira’ for

fabric of Odiya

clothing

houses

‘Biswa

Bangla’ and

‘Paramparik

Mithila’ for

fabrics of

eastern states

‘Ganganagari

Sutra’ for Uttar

Pradesh textile

houses

Kalamkari , Pochampalli

of Andhra Pradesh to be

cobranded

சேலை

கலை

(Celai katai)

for

Kanjeevaram

‘Saree katha’

for Paithani

sarees

‘Phulkari’ and

‘Pashmina’

for Northern

India clothing

houses

Indian Apparels( branding) Marketing strategies for the MSMEs

Bharata Samagri App to

consolidate Bharata Kutir

Draubya, Bharat Vastra and

Bharata Bhojana categories

Cashbacks and Scratch cards

from each transaction in

Bharata Samagri app,

Gift vouchers and Gift cards

from BHIM collaboration

MSME stalls in state and nation

branding activities and in State

and national trade expos by

Government

Influencer and Affiliate

marketing to be used in social

media campaigns

MARKETING

EFFORTS

Indian Coir Industry

(branding)

Indian Food & Beverage

Industry (branding)

• Trade expos

• Food and Beverages of the MSMEs can be

sold in Amazon pantry

• YouTube and social media marketing for

‘Bharata Bhojana’

• Product bundling by small sachets

• IRCTC caterer services tie ups

• PSUs and government offices tie ups

• Trade expos

• Brand storytelling of the coir industry

• Adverts to be designed to show the

premiumness of the coir which prevent back

ache and body ache

• Eco friendly nature of it can be highlighted

which is being accepted by different nations

owing to global warming being the buzzword

MARKETING

EFFORTS CONTD..

Awareness of all sanitary /

phytosanitary norms, specifications,

packaging, etc. needs to imparted to

the MSMEs

Awareness of seasonality

and demand requirements

overseas, to reduce fluctuating

inventory( stock outs)

Making MSMEs aware about the

proposed clusters and the proposed

structure in different MSME

industries

Making MSMEs aware about digital

initiatives of government, customs

electronic data interchange

platforms and other EDIs

MAKING MSMES

AWARE…

Lack of awareness on existing

schemes and policies related to

exports. Making MSMEs aware about

E-commerce Policies, BharatNet

Project, Skill India, Increased FDI

Limit, Make in India

Understanding the different areas

where MSMEs can foray with the

cognizance of government

institutions, state and national

universities

Best in class

Very practical

High-level

Spot on

HARDNESS TO

ACQUIRE

ACTIONABLE

Educating about the

importance of Value addition

and Product Differentiation

Connecting traditional

artisan through increased

internet penetration

Educating about Intellectual

Property Rights about

different commodities

Educating about different

Foreign Trade Policy Benefits

and how to leverage them

Setting Priorities Right

Q&A

THANK YOU

APPENDIX

Indian processed food industry has shown a tremendous potential

for exports:

FPI represents Food Processing Industry and depicts that FPI has been

a constant source of growth in growth in exports

Source: International Journal of Computing and Corporate Research

Exporting Market Share is as given:

Balance of Trade for Apparel Industry is around $7000

crore

APPENDIX

Table 2 Table 1

Table 4 Table 3

APPENDIX

APPENDIX

GLOBAL OPPORTUNITIES

APPENDIX