MSME exporters advised to diversify into new markets, EXIM Bank says amid global uncertainty

Export-Import Bank of India EXIM managing director Harsha Bangari said Indian exporters should widen their focus. Bangari urged MSMEs to consider newer overseas destinations as global risks rise. Bangari said traditional developed markets can feel saturated for some products. Bangari linked the advice to concerns over tariffs, conflict, and shipping delays.

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Bangari said global uncertainty has affected MSME cash flows and raised financing needs. Bangari cited "the US tariff action\" and \"the Middle East crisis\" as pressures. Bangari also pointed to longer logistics due to route stoppages. Bangari said these headwinds have increased the need for higher credit among MSMEs.

EXIM Bank support for MSMEs and newer markets

\"As EXIM Bank, we also encourage Indian companies, especially MSMEs, to look at newer markets because sometimes we feel there is a saturation in the developed or traditional markets, and for the newer markets, the comfort that MSMEs or other corporates want is in terms of security of their money coming back for the goods,\" Harsha Bangari, managing director at EXIM Bank, told.

Bangari said EXIM Bank offers trade finance support for exporters entering newer markets. Bangari said the support is meant to reduce payment-related risks. Bangari explained how the bank addresses payment security for shipments. \"We are guaranteeing the LCs issued by the importers bank,\" she added.

MSMEs credit demand and costs amid global uncertainty

\"The requirement of MSMEs for higher credit may have definitely gone up because they have been facing headwinds from various geopolitical events, be it the US tariff action, subsequently the Middle East crisis, and now, of course, elongated logistical requirements due to the stoppage of certain routes and all that,\" she said.

Bangari said credit availability for MSMEs has not seen any major disruption so far. However, Bangari noted that demand for funds has increased. Bangari also said smaller exporters still face barriers to finance. Bangari highlighted high funding costs and the need to provide collateral.

\"Currently, when we look at MSMEs again, they have problems accessing credit, the cost of credit is very high, and there is a requirement for collateral,\" she said.

Bangari said responses from the government and financial institutions are evolving with conditions. Bangari described the situation as changing and linked support measures to emerging risks. Bangari indicated that actions may vary based on the challenge faced. \"The environment is very fluid and the challenges are very different and depending on the challenges faced, I am sure the response will be there,\" she said.

With inputs from PTI