Trade, import and export for MSMEs: The Ukraine conflict has created supply chain disruptions affecting energy, food, and materials used in the production of key technologies, Minister of State for MSMEs Bhanu Pratap Singh Verma told the Rajya Sabha. The statement was part of his reply to the question of whether any assessment has been made about the impact of the Russia-Ukraine war on exports of MSMEs to these countries. “India’s exports to Ukraine and Russia have been led by MSMEs which include pharmaceuticals, machinery, and apparels etc.,” he said.
According to the provisional data shared by Verma, MSME exports to Russia, Ukraine, and Belarus in FY22 worth $2.18 billion accounted for only a 1.15 per cent share of the total exports worth $190 billion of the MSME sector to the world. The share had declined from 1.38 per cent in FY20 (pre-Covid) to 1.30 per cent in FY21 (first Covid year) with exports amounting to $1.87 billion out of $143.9 billion in total Indian MSME exports globally.
Among Russia and Ukraine, the former had the majority share of MSME exports from India. In FY22, MSME exports to Russia stood at $1.87 billion, up from $1.58 billion in FY21 while exports to Ukraine dipped to $283 million in FY22 from $294 million in FY21.
Amid the military conflict between Russia and Ukraine, which started in February this year, Indian exporters were estimatedly hit by different challenges such as delays in shipments, late payments, damage to consignments, and more. India’s bilateral trade with Russia and Ukraine stood at $11.9 billion and $3.1 billion in 2021 respectively, as per the official data. The exports to Russia had increased to $3.18 billion in April–February period of FY22 from $2.65 billion in FY21, minister of state for commerce Anupriya Patel had informed the Lok Sabha earlier this year.
Meanwhile, the share of MSMEs in India’s annual merchandise exports dropped to 45.04 per cent in FY22 despite the latter surging to a record high amount of $421 billion. MSME exports share during FY21 and FY20 stood at 49.35 per cent and 49.75 per cent respectively. The government has targetted $1 trillion in exports by FY27.