By Nikita Singla
Import, Export, Trade for MSMEs: In India, the reduction of gender disparity in both, economic activity, and in the distribution of economic gains, is increasingly becoming a key agenda item in policy discussions, more so now to meet the global expectations of keeping gender equality at the centre of the G20 agenda. Yet, India’s new Foreign Trade Policy announced last week misses to mainstream women’s inclusiveness in trade.
In 2021 UN Global Survey on Digital and Sustainable Trade Facilitation, India’s implementation rate in the ‘Women in Trade Facilitation’ category was at 66 percent, which covered trade policies to increase women’s participation in trade, trade facilitation measures to benefit women in trade, and women’s membership in national-level trade committees.
In response to this, there has been a greater focus on a bottom-up, inclusive route to economic development, with the spotlight on MSMEs, women and youth-owned businesses, digital technologies, targeted skill development and more inclusive trade reforms. Impact of some of these measures was reflected in the higher representation of women at the International Trade Fair, where in November 2022, out of the 205 MSMEs at the MSME Pavilion, 74 percent were led by women entrepreneurs displaying their products across 26 sectors such as textiles, food, metallurgy, leather, gems and jewellery among others.
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Inclusive trade reforms
India’s high-level commitment towards gender-inclusive trade is reflected in Government’s National Trade Facilitation Action Plan (NTFAP) 2020-23 where Action Point 27 is specifically aimed at promoting gender inclusiveness in trade through conceptualising and developing a “women in global business programme” aimed at capacity building and connectivity, and providing information and resources, mentoring programme, connection and communication with fellow businesswomen.
During the pandemic period, India also took several measures to facilitate trade and ensure seamless cargo clearance at ports through the Turant Customs Programme, which aims to make the customs clearance process faceless, contactless and paperless. Similarly, Unified Logistics Interface Platform (ULIP), as a part of National Logistics Policy ensures technologically-enabled, integrated, cost-efficient, resilient, and sustainable logistics ecosystem for accelerated and inclusive growth.
These reforms shrink the space for bribes and corruption in the trade process which research shows disadvantages women-owned businesses disproportionately. An increasing shift from physical to digital interactions has the potential to level the playing field for women, if complemented with efforts towards enhancing digital awareness and adoption among women.
As women enter trade with a pre-existing disadvantage, built on social, institutional, and structural constructs, the ability of women to participate effectively in trade is dependent on more than what trade policy can address alone. It requires trade policy, domestic reforms and capacity building initiatives to work in parallel.
Capacity building and Up-skilling
India has been taking various initiatives with respect to capacity building in digital access, financial literacy and trade up-skilling. A Government of India initiative by NITI Aayog, Women Empowerment Platform (WEP) aims to promote and support aspiring as well as established women entrepreneurs in India and assist them in their journey from starting up to scaling up and expanding their ventures. It’s a more holistic programme that focuses on incubation and acceleration, entrepreneur skilling and mentorship, marketing and taxing assistance, as well as financial assistance.
There are other programmes that focus more on one aspect such as access to market. These include Womaniya initiative by Government e-Marketplace (GeM) under the Ministry of Commerce and Industry and ‘Mahila e-Haat’ established by the Ministry of Women and Child Development that enables women entrepreneurs to sell their products to various Government departments and other buyers respectively.
FICCI Ladies Organization (FLO), Women’s wing of FICCI signed a MoU with NSDC to provide free access to learning resources and digital skilling awareness drives through e-skills. This has increased home-preneurs in urban and semi-urban areas in India, giving them a flexible work environment, direct connection to buyers, and cutting out the middlemen.
There are other capacity building activities initiated with international support that focus on digital literacy, cyber security, development of unorganised sector, and environmentally friendly trade practices. To sustain greater impact at the grassroots level, women-only start-up incubation centres and all-women industrial parks envisage a secure and sustained ecosystem for women entrepreneurs.
Skilling, training and mentoring of women should remain a top priority as capacity building of women SMEs is increasingly being recognised by countries as a sustainable empowerment tool in the global economy. Simultaneously, the focus can be on other reform areas, such as (1) reforms in trade institutions (2) high-level trade policy reforms such as incorporating gender-specific reforms in trade agreements under negotiation, and (3) women’s holistic empowerment, through greater investment in care economy.
There is progress to celebrate, however there is more progress to make.
Need for gender-disaggregated data
To further improve the participation of women SMEs in trade, we need to start measuring the rate of participation, as only “what gets measured gets done”. Gender analysis is the opposite of gender blind or gender neutral. For this, it is crucial to collect national gender-disaggregated data at the firm level and more importantly, make it readily accessible to third-party research organisations.
More granular trade statistics broken down by gender will allow policymakers to better assess the degree to which women participate in international trade as well as barriers to gender equity, ultimately leading to more effective policy interventions and reforms.
Data from the National Sample Survey 73rd round showed that the amount of loan accessed by women entrepreneurs is more than 50 percent lower than the amounts accessed by their male counterparts. While many government and private programmes, such as the Pradhan Mantri Mudra Yojana (PMMY) facilitate easy access to institutional credit for women-led micro-enterprises, women entrepreneurs need to be educated about the full range of financial instruments and digital finance technologies through targeted informational campaigns.
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Besides building capacity of women with regards to financial inclusion, reforms are also needed in the finance sector to overcome gender financing gaps. For example, more gender-balanced staff inside the financial institutions can help address the societal bias and scepticism towards women-owned enterprises. Currently only 17 percent of employees in scheduled commercial banks in India are female. Alternative credit scoring options can be considered to replace the requirement for collateral, utilising trading history from digital platforms or compiling a score based on cash flow analysis, household income and behavioural data, where gender-disaggregated data will be of help.
India has been a pioneer in organising women in the informal sector such as workers’ cooperatives and self-help groups; greater access to these associations is likely to benefit women SMEs significantly as it facilitates establishing business relationships, promoting products and services, strengthening voice in trade policy circles and accessing training, finance and information on trade regulations.
Given the gender disparity levels in India as well as growing attention around groupings such as Indo-Pacific, India’s leadership to add a gender-inclusive perspective to cooperation could offer India an opportunity to address its capacity gaps and capital constraints, and make greater strides in regional partnerships. Indian policymakers, the private sector, NGOs, and others committed to advancing gender equity through trade should seek to harness the Indo-Pacific Economic Framework for Prosperity (IPEF), the Quad, India’s 2023 G20 Presidency, and other multilateral initiatives in the region to advance gender-inclusive trade.
The article is based on the author’s recent policy brief titled ‘Women’s Inclusion in India’s Trade Ecosystem’.
Nikita Singla is Associate Director at New Delhi-based Bureau of Research on Industry and Economic Fundamentals (BRIEF). Views expressed are the author’s own.
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