According to the Ministry of MSME, MSMEs contributed to over 45% of India’s total exports in FY2024. Handloom exports made an impressive contribution to this, with approximately $1,802 million in the same period, with products exported to more than 100 countries. The share is expected to be equally sturdy in FY2025, reflecting the potential cross-border trade (CBT) has for MSMEs.

However, smaller enterprises often believe that the export arena is for the big players and corporations. This is a misconception, as there’s a growing demand for ethnic products overseas. For instance, the Indian ethnic apparel market is worth $20.9 billion and is expected to reach $26.9 billion by 2026. For demands like these, the Indian government has introduced various initiatives such as the Raising and Accelerating MSME Performance (RAMP) Scheme, the Capacity Building of First-Time MSME Exporters (CBFTE) Scheme, and the IndiaXports 2021 Portal. These are aimed to enhance productivity, market access, and competitiveness for small businesses.

Besides these initiatives, MSMEs can tap into a growing export opportunity if they innovate and adapt to the global market. Here are some strategies to maximize their export potential.

1. Understanding the Opportunity

NITI Ayog’s ‘Boosting Exports from MSMEs’ 2024 report states that MSMEs can create a strong presence in handicrafts, handloom textiles, ayurveda and herbal supplements, leather goods, imitation jewellery and wooden products as their market size is more than $340 billion. Additionally, the festive season also presents massive opportunities for MSMEs as cross-border e-commerce is projected to grow to $12 billion by 2024.

Cross-border trade has an immense scaleable opportunity. Global markets are now more accessible due to advances in digital trade platforms and logistics, which can help MSMEs capture a larger part of the export market. 

2. Making Use of Digital Platforms such as e-marketplaces and social media

. Not only are apps and websites among the most effective ways for MSMEs to expand their export reach, but online marketplaces also offer ready-made infrastructures to connect with global consumers without needing a physical presence. These platforms provide tools for logistics, online payments, and customer service, making it easier for businesses to focus on production and marketing.

Additionally, social media has a big role in building brand visibility and engaging with international audiences. Nearly 55% of the micro-enterprises and around 45% small enterprises have moved to the digital space. 

MSMEs can showcase their products, run ad campaigns, and build a global following. Consistently creating engaging content and offering customer-centric promotions can help MSMEs boost their online presence and tap into diverse markets.

3. Streamlining Operations

A Ministry of MSMEs survey shows that 45% of MSMEs have integrated AI into their operations. Efficient operations are important for businesses looking to scale in international markets. MSMEs should focus on optimizing supply chains, enhancing production efficiency, and ensuring timely deliveries to meet the demands of global customers. Adopting technology, such as inventory management software, can help businesses monitor stock levels, reduce wastage, and avoid over or under-stocking.

4. Partnering with Reliable Logistics Providers

Ensuring that products reach customers in perfect condition is crucial for maintaining customer satisfaction and building a loyal base. Thus, efficient logistics are pivotal in reducing shipping costs, an important factor when competing in global markets.

5. Diversifying Product Offerings

Another way MSMEs can maximize their export potential is by diversifying their product range. Catering to different customer segments in various regions by offering a broader selection of products can help businesses increase their market share. For instance, a business producing traditional crafts can explore adding modern designs to its portfolio to appeal to younger, trend-conscious consumers abroad.

Product diversification also allows MSMEs to reduce their dependency on a single market or product, which is critical for mitigating risks associated with economic downturns or changing market demands.

6. Staying Updated with Market Trends

Every market across the globe has its unique trends, consumer preferences and behavior. For MSMEs to succeed in the export market, understanding these is essential. This involves analyzing customer preferences, being aware of cultural nuances, and tracking competitors’ activities. Researching target markets allows businesses to tailor their products to specific regions, helping them stand out and gain a competitive advantage.

For example, a small business producing textiles might discover that bright colors and intricate patterns that work in one certain international market don’t fit in another. The business can boost its appeal and sales in those regions by adjusting product offerings and marketing campaigns to cater to those preferences.

7. Building Strong Relationships

The export market is built on relationships—whether it’s with customers, suppliers, or partners. MSMEs that prioritize strong, transparent communication with their clients and business partners are more likely to build long-lasting business relationships. 

Furthermore, collaborating with industry associations, trade partners, and local business networks can also open doors to new opportunities. Participation in international trade fairs, virtual marketplaces, and business forums are great ways to stay informed about the latest trends and establish valuable industry contacts.

8. Embracing Sustainability

Sustainability is more than just a buzzword in the global markets. Consumers and businesses are treating it as a necessity and preferring environmentally friendly and ethically produced products. Infact, 60% of the Indian consumers have already made the switch to sustainable products. MSMEs can make the most of this growing demand by adopting sustainable practices.

Using eco-friendly raw materials, reducing waste, implementing energy-efficient processes, and obtaining sustainability certifications (like Fair Trade or Organic) can help MSMEs stand out in the global market. These efforts not only attract eco-conscious customers but also enhance brand credibility and align businesses with international sustainability standards.

9. Utilizing Government Support 

MSMEs can leverage government support and international trade agreements to enhance their exports. While the government has various schemes and incentives, trade agreements between countries reduce tariffs and ease cross-border regulations. Staying informed about such initiatives can help MSMEs with expand their exports.

10. Accessing Loans from NBFCs for Business Expansion

Securing finance remains a major hurdle for many MSMEs, particularly when expanding their export operations. However, numerous financial institutions like Protium offer loans to help MSMEs to propel them towards their business growth ambitions. Business loans can be used for various purposes such as enhancing product quality per that country’s acceptable standards,  investing in digital marketing and more.