Ubharte Sitaare Fund: Empowering Indian Exporters

The Indian exporters, especially MSMEs (Micro, Small, and Medium Enterprises), have been empowered with the innovative Ubharte Sitaare Programme. This article explores the launch, purpose, and benefits of the Ubharte Sitaare Fund, which is designed to bolster India's export capabilities.

Background of the Ubharte Sitaare Programme

In a landmark announcement during the 2021 Budget, Finance Minister Smt. Nirmala Sitharaman introduced the Ubharte Sitaare Programme (USP). The initiative is aimed at eradicating the barriers faced by small and mid-sized companies in achieving their export aspirations. Anchored by India Exim Bank along with SIDBI, this programme is a strategic move to enhance India's export viability. The Ubharte Sitaare Fund, an Alternative Investment Fund registered with the Securities and Exchange Board of India (SEBI) in July 2021, has seen contributions of INR 40 Crore each from India Exim Bank and SIDBI, with a total corpus of INR 250 Crore.

Launch of the Ubharte Sitaare Fund

On 21st August 2021, the Honourable Finance Minister officially launched the ‘Ubharte Sitaare Fund’. At the launch, MSMEs were acknowledged as the backbone of the Indian economy. The programme's main features include:

Identifying companies with adequate technology, product, or processes.
Providing support through a mixture of equity, debt, and technical assistance.
Extending support to underperforming companies with strong export potential.

Objectives of the Ubharte Sitaare Programme

The programme aims to:

Enhance India's competitive edge in selected sectors with financial backing and comprehensive support.
Support units with high export potential that are constrained by financial limitations from scaling up their operations.
Identify and promote companies with differentiated products, processes, or technology, and boost their export businesses.
Assist existing exporters in expanding their product lines and accessing new export markets.
Identify and address challenges impeding exports for successful companies.

Types of Assistance Available Under the Programme

Eligible companies can receive both financial and advisory assistance, including:

Equity or equity-like instruments.
Term loans for technology upgrades, modernization, research & development, and balancing production facilities, covering:
1. Tools, jigs, and fixtures;
2. Testing and quality control equipment;
3. Land and building;
4. Machinery and equipment.
Technical assistance for:
1. Product adaptation and improvement,
2. Market development activities (including overseas travel for product or market development),
3. Studies related to sectors, regulations, markets, or Techno-Economic Viability.

Eligibility Criteria for the Ubharte Sitaare Programme

To qualify for the programme, companies must meet the following criteria:

Offer a unique value proposition in processes, products, or technology that aligns with global standards.
Be a small or mid-sized company with the potential to enter global markets, having an annual turnover of up to INR 500 Crore.
Be fundamentally strong with robust financials and an outward orientation.
Possess:
1. A solid business model,
2. Strong management capabilities,
3. A strong focus on product quality.
Sectors considered for eligibility include:
1. Aerospace,
2. Automobiles and auto components,
3. Chemicals,
4. Capital Goods,
5. IT & ITeS,
6. Food Processing,
7. Defense,
8. Pharmaceuticals,
9. Machinery,
10. Textiles, and
11. Precision engineering.

The Ubharte Sitaare Programme stands as a robust platform for fostering the growth of MSMEs and nurturing India's prowess in the global market. For companies looking to capitalize on this initiative, understanding the necessary steps such as filing appropriate registrations and aligning with the programme's objectives is paramount. Companies that are keen on tapping into this opportunity are advised to prepare their applications by leveraging resources like upgraded digital platforms and ensuring their business models meet the required criteria for success.

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Frequently Asked Questions

Common questions about Ubharte Sitaare Fund.

The Ubharte Sitaare Programme is a government initiative announced in Budget 2021 aimed at supporting small and mid-sized companies in realizing their export ambitions. It will be anchored by India Exim Bank and SIDBI, providing a mix of equity, debt, and technical assistance to eligible companies.

The Ubharte Sitaare Fund is an Alternative Investment Fund registered with SEBI in July 2021, with a total corpus of INR 250 Crore. India Exim Bank and SIDBI have contributed INR 40 Crore each to this fund, which will be used to support companies under the Ubharte Sitaare Programme.

The key objectives of the Ubharte Sitaare Programme are to boost India's competitiveness in selected sectors, support companies with export potential but lack of finance, identify and encourage companies with differentiated products or processes, help existing exporters widen their product range and target new markets, and address challenges hindering exports.

Eligible companies under the programme can receive financial assistance in the form of equity or equity-like instruments, term loans for technology upgradation, modernization, research and development, and investment in tools, equipment, land, and buildings. They can also receive technical assistance for product adaptation, market development activities, and studies related to sectors, regulations, or markets.

Companies eligible for the programme should have a unique value proposition in process, products, or technology that matches global requirements, the ability to enter global markets, an annual turnover up to INR 500 Crore, fundamental strength, outward orientation, a good business model, strong management capabilities, and a focus on product quality. Suggestive sectors include aerospace, automobiles, chemicals, capital goods, IT, food processing, defense, pharmaceuticals, machinery, textiles, and precision engineering.

The Ubharte Sitaare Programme can benefit small and mid-sized exporters by providing them with much-needed financial and technical support to scale up their export operations, upgrade technology and processes, adapt products for global markets, and overcome challenges hindering their export growth.

The key stakeholders involved in the Ubharte Sitaare Programme are the Ministry of Finance, India Exim Bank, SIDBI, and the Small and Mid-sized Exporters who are the intended beneficiaries of the programme.

The Ubharte Sitaare Programme holds significant importance for the Indian economy as it aims to boost the competitiveness of Indian exporters, particularly MSMEs, in the global market. By supporting these companies, the programme can contribute to increased exports, economic growth, and job creation.

The article does not provide specific details on the application process for companies to avail assistance under the Ubharte Sitaare Programme. However, interested companies can likely approach India Exim Bank or SIDBI for more information and guidance on the application process.

The role of SEBI (Securities and Exchange Board of India) in the Ubharte Sitaare Programme is to register the Ubharte Sitaare Fund as an Alternative Investment Fund, ensuring compliance with relevant regulations and providing oversight for the fund's operations.