With falling exports, SMEs now turn to domestic markets

NEW DELHI: The small and medium enterprises(SMEs) in India are now considering to explore the potential of the domestic market as the global economic downturn have weakened the foreign market. Currently, the SMEs employ almost 6 crore people in the country and contribute nearly 70% to the country’s GDP.

Mr Jayant Davar, president, Automotive Component Manufacturers Association, said, “Today the domestic market stands at 84% and the level of exports have dropped from its standard mark of 20%. Going forward, by 2020, we expect exports to remain in the range of 20-25% and the domestic market will drive growth.” Report suggests that the share of the domestic industry has risen significantly.

By 2016, the export and domestic split would be 50:50, and since last few years, the trend is tilting more towards domestic demand. The limited growth potential in exports has lead to the rising stress on the domestic market. Commerce secretary Mr Rahul Khullar has also said that India can no longer expect exports to grow at 25-30%. Data reveals that exports declined 4.7% in 2009-10.