How can Indian MSMEs grow to compete in the world?
India's micro, small and medium enterprises (MSMEs) sector has been at the centre of attention for a long time now. There are more than 63 million MSMEs, which employ around 110 people and form a key pillar of the Indian economy. However, 99% of the companies remain micro in their life cycle. This sector is plagued with low productivity, lack of efficiency and limited means, which lead to poor competitiveness in the global sphere.
To understand how the sector can grow and if India can compete with the world, ETRise Top MSMEs Conversation recently conducted a digital roundtable on the topic. The experts agreed that Indian small businesses lacked in quality, consistency, efficiency, standardisation, pricing and gaining access to new technology.
"India's micro industries’ contribution to GDP is around 30%, which is at the lower end of the scale when compared with other countries," said Jiten Arora, Venture Lead of Solv & Member at SC Ventures. This leads to the creation of the “missing middle or dwarfs”, which primarily happens due to the lack of a trusted ecosystem. Micro industries tend to work within their own ecosystems and which in turn leads to lack of access to capital. "India has close to a $300-billion funding gap when it omes to micro SMEs,” said Arora. “Getting financial inclusion is very important for this. NBFCs and financial institutions need to look at the underwriting standards and modify them for this to change."
Read more at: https://economictimes.indiatimes.com/small-biz/sme-sector/how-can-indian-msmes-grow-to-compete-in-the-world/articleshow/84965039.cms