Exim Bank Study Reveals Key Challenges and Opportunities for MSME Exports in India

Exim Bank recently conducted a detailed study to understand the challenges faced by Micro, Small, and Medium Enterprises (MSMEs) when it comes to exporting their products. This study used both primary surveys and secondary research to get a complete picture.

Key Challenges for MSMEs in Exporting

The study found several main problems that stop MSMEs from exporting more:

• Lack of information about export opportunities: Many MSMEs do not know about the various markets or buyers available overseas.
• No strong connections with foreign distributors or customers: Building relationships with buyers and agents in other countries is difficult for many MSMEs.
• Marketing challenges: MSMEs struggle with promoting their products internationally.
• Lack of awareness about financial support: Many MSMEs are unaware of government schemes and financial help meant to support exports.
• Difficulty following export regulations: Export rules can be complicated, and MSMEs often find it hard to comply with the laws of other countries.

Importance of MSMEs in India’s Economy and Exports

MSMEs play a very important role in India’s economy and exports. According to data from the Directorate General of Commercial Intelligence and Statistics (DGCI&S), MSMEs directly exported goods worth about US$127.6 billion in 2023-24. This made up nearly 29.2% of India’s total merchandise exports for that year.

This figure only includes direct exports by MSMEs. When indirect exports—products sold through middlemen or merchant traders—are also considered, the contribution of MSMEs is even higher. The Ministry of MSME, Government of India, reported that MSME-related products accounted for about 43.6% of India’s merchandise exports in 2022-23.

Financing for MSMEs: Growing but Still Needs Support

Finance is one of the most important factors for MSMEs to compete and grow in export markets. The study shows that credit or loans to MSMEs have steadily increased. By the end of March 2023, the total credit given to MSMEs by all financial institutions was around ₹27.8 lakh crore.

Most of this credit came from Scheduled Commercial Banks (SCBs), which have increased their lending to MSMEs at a strong rate of 24.1% per year from 2020-21 to 2022-23. Besides banks, Non-Banking Financial Companies (NBFCs) and other institutions, along with platforms like Trade Receivables Discounting System (TReDS), are helping MSMEs get diversified and easier access to finance.

Export Participation Among MSMEs is Low

The study points out that only about 1% of MSMEs registered under the Udyam portal are currently exporting. To improve this, the study recommends a comprehensive strategy that includes:

• Better marketing support for MSMEs to promote their products internationally.
• Closing the gaps in financing so MSMEs can invest in growing their exports.
• Improving MSMEs’ export capacity, including adopting new technology.
• Strengthening government support programs and export institutions.
• Encouraging the use of innovative methods like e-commerce for reaching global customers.

By taking these steps, MSMEs can unlock their full potential and help India reach the government’s goal of US$ 2 trillion in exports by 2030.

About the Study and Event

The study, titled “Promoting Exports from the MSME Sector,” was released by Shri M. Nagaraju, Secretary of the Department of Financial Services, Government of India. The release took place during a joint event by Exim Bank and the Asian Development Bank (ADB) called the “Seminar on Business Opportunities with the Asian Development Bank” on April 30, 2025, in New Delhi.

More than 100 participants attended the seminar, including representatives from the government, public sector companies, banks, financial institutions, academic experts, think tanks, and NGOs. Speakers shared valuable information about business opportunities in ADB-funded projects, ADB procurement and consultant recruitment processes, the Government of India’s support through Exim Bank’s Lines of Credit program, and Exim Bank’s financing options for MSMEs.