In a development that could demotivate Indian SMEs planning to expand into the Commonwealth Independent States (CIS) region, trade experts have identified huge scope for India’s business collaboration with the CIS region but observed that poor trade relations are a barrier against the possibilities.

This development is pertinent for Indian SMEs because the Federation of Indian Micro and Small & Medium Enterprises (FISME) has identified some of the most SME-dominated sectors such as textiles, garments and handicraft, among others, as lucrative collaboration or investment areas in the CIS region. The industry body has added that the dismal logistic and law situation, language barrier and lack of financing options, among other factors, are preventing formation of better trade ties between India and the CIS countries.

Notably, these observations were emphasised by the decline in bilateral trade between the two regions from US$1,666.53 million in 2008-09 to US$1418.41 million in 2009-10. One of India’s biggest exports to the region comes from the pharma sector, which has significant SME-presence.

Incidentally, Belarus, a CIS country, recently invited investments from Indian pharma-based units. This could encourage more Indian pharma-based SMEs to explore trade opportunities in the CIS countries. Indian SMEs engaged in machinery and instruments, gem and jewellery, garments and transport equipment exports can also look to follow suit.