There are over USD 800 billion in exports and imports of goods in India every year (excluding services), which accounts for more than 30% of the country's GDP.
SMEs account for over 40% of this amount, or about USD 300 billion per year.
Almost half of this trade goes to developed countries (US, EU, Japan, China, etc.).
The cross-border trade sector directly employs over 30 million people in India.
Exports are particularly attractive to SMEs because –
High margins - Competitiveness due to low labor costs and availability of raw materials
There must be a better track record of overseas buyers in terms of payment, as well as easier access to credit insurance.
Buyers from developed countries are far more disciplined when it comes to payment.
3% to 5% GST benefit plus incentives
Depreciation of the INR benefits
Borrowing interest subventions, Capital subsidies, and import duty waivers (advance authorisation)
Over 14 million shipments cross India every year (by sea and air).
SME shipments have little digital footprint or data consolidation associated with them.
The current process is laborious, paper-intensive, and unorganized.
Each shipment takes about 60-75 days from start to finish.
India's EXIM process is quite complicated.
For every shipment, an SME must coordinate with ten or more service providers, in addition to its international customers and suppliers.
Ancillary activities cost between 10-12% of every shipment/invoice.
A total of USD 35 billion is spent by Indian SMEs annually on ancillary services from various service providers.
Here is an example of these costs for an FCL shipment.
The total overhead (excluding manufacturing and manpower costs) for this shipment is approximately USD 4,000.
Keeping up with local and international government regulations is also necessary.
It is also necessary to catch up on government regulations, both local and international.
Surprisingly little or only piecemeal technology support is available for these webs of activities.
It's interesting to note that Indian SMEs are not an exception and suffer from the same inefficiencies around the world.
Although some digitization has taken place in India on the government side (DGFT, ICEGATE).
However, the outcome is far from ideal.
SaaS and B2B startups have addressed many of the common problems facing SMEs, including GST, accounting, e-payments, and CRM.
It is unfortunate that there are no tools or solutions that simplify the lives of SMEs exporting and importing.
Most custom ERPs used by SMEs are focused on accounting, inventory, HR, etc., not on the export/import workflow and digitization.
Larger companies typically deploy SAP extensions to their ERP solutions.
As such, these solutions take months/years to install & stabilize, and such solutions are completely out of reach for SMEs due to the cost, time, effort, and uncertainty involved.
SME check here exporters/importers cannot digitize their export/import workflow with an off-the-shelf / cloud-based tool.
Due to this, teams from companies handling Export / Import rely on locally stored documents, cabinets full of hard copies, spreadsheet trackers, and proverbial emails without any system support or automation.
It is for this reason that many SMEs struggle to manage and/or expand their EXIM business effectively.
Is there a better way of dealing with this?
Supply Ninjas’ team has used this opportunity to automate, digitize, and simplify the lives of SME exporters and importers through all in one platform Ninjas Pro.
Click here to know more about Ninjas Pro