This paper summarizes the arguments and counterarguments within the scientific discussion on identifying the potential markets for Micro Small and Medium Enterprises (MSMEs). The main purpose of the research is to present the commodities and potential destinations that Indian MSMEs can tap on to broaden their business and eventually to the overall growth of the country. Systematization of the literary sources as a part of the study indicates that MSMEs have made a significant contribution to the country’s GDP and trade. A survey of the approaches for solving the objective of the research reveals that trade indices and CGE models are the most appropriate when it comes to trade policy analysis. The relevance of this scientific problem decision is that Indian MSME’s contribute to more than 30% of India’s GDP and enhancing MSME exports would help the country achieve an inclusive, socio-economic growth. Investigation of the topic in the paper is carried out in the following logical sequence: We first analyze the commodities that have a potential for growth and then move ahead to analyze the promising markets. To perform quantitative analysis, we use trade indices and estimations from Computable General Equilibrium -GTAP (Global Trade Analysis Project) model. To analyze potential commodities, we use Product Space Analysis with three indicators, namely, the Revealed Comparative Advantage (RCA), Revealed Trade Advantage (RTA), and Market Demand Index. To analyze the potential markets, we use the Export potential indicator and GTAP estimates for the years 2022-27. The object of the research is to empower MSMEs in India with insights and data about the potential markets and commodities for export from India. The paper shows that MSMEs have a higher potential for exports in textiles and clothing, food products, vegetables, and other agricultural products, and machinery and electrical equipment sectors. In terms of markets, our analysis reveals that MSMEs have a broad scope in the UAE, China, Bangladesh, and the USA.
India has set an ambitious export target of US$0.5 trillion by 2025 and US$1 trillion by 2030 from US$291 billion in 2021 as part of its Atmanirbhar Bharat campaign. Since India opened up its economy in 1991, India has concluded several bilateral and regional free trade agreements. India signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates in February 2022 and Economic Cooperation and Trade Agreement (ECTA) with Australia in April 2022. India is in the process of concluding trade agreements with the UK, the European Union, Canada, Israel and GCC countries. This article estimates the impact of all the above mentioned FTAs on India’s GDP and its components with an increased emphasis on its exports using a computable general equilibrium framework and machine learning techniques. The analysis estimates that the FTAs will boost India’s GDP by 4.10% to add US$109.096 billion in 2030 and the exports increase by 16.73% or US$46.08 billion. The exports from India to UAE, Australia, UK, European Union, Canada, Israel and GCC countries are estimated to increase by US$67.312 billion by 2030. This increase is relatively higher than the increase in aggregate exports of India suggesting a trade diversion from countries that are not part of the FTAs toward the seven countries with which India is anticipated to sign an FTA.
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