5th National Summit Trade Finance for Inclusive Growth

India has set an ambitious target of achieving $2 trillion in exports within a specified timeframe. Achieving this target requires a comprehensive strategy that addresses various aspects of trade, including trade finance. Trade finance plays a critical role in facilitating international trade by providing the necessary financial instruments and services to the corporate sector. Governments, multilateral development banks, financial institutions, and international organizations work together to develop innovative financing mechanisms to promote exports, improve risk management practices, enhance regulatory frameworks, and expand access to credit information for exporters.

In India, MSMEs account for about 44-45% of its exports. Therefore, they are a key beneficiary of the export finance programmes operating in India. A key issue that has emerged is that there is a significant trade finance gap for MSMEs. Therefore, there is clearly a need to relook at the existing trade finance avenues and develop alternative financing channels to cater to the needs of all segments of Indian Industry. A multi-faceted approach encompassing financial inclusion, digitalization, infrastructure development, policy reforms, and collaborative initiatives is needed to bridge the trade finance gap.

Advancements in export credit and supply chain financing, supply chain management (SCM) tech, ESG and sustainability have been transformative in recent years and has introduced efficiency, transparency, and accessibility to in the trade finance arena. However, there is much more that can be done.