From the Desk of JS (SME) - Jan 2019

Reorienting MSMEs to go Global


  • Micro Small and Medium Enterprises (MSMEs), are the nurseries for entrepreneurship and innovation. Indian MSMEs are widely dispersed across the country and produce around 6000+ diverse range of products and services to meet the needs of the local markets, the global market and integrating into domestic and global value chains. They have evolved not only more innovative offerings, but also offer greater value to their partners so that most competitive and mutually beneficial outcomes become possible. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to firm competition in the domestic and international arena. Being the second largest employment generating sector in India after agriculture, MSME sector has emerged as a powerful engine of the country’s economic growth, contributing around 45 per cent of the overall exports from India.

  • It is established fact that India has acquired considerable experience and expertise in the industrial sectors – especially in the MSME sector. India has given considerable emphasis for the development of MSMEs and evolved a pattern of growth suitable for its socio-economic environment.

  • MSME sector- Epitomising Vitality

  • Micro, small and medium enterprises (MSMEs) are at the heart of industrial activity in India. There are more than 63 million MSMEs, which account for 45% of industrial production, 30.5% of services sector and employ close to 110 million people. A dynamic global market coupled with domestic policy focus can unleash opportunities for MSMEs to go global.

  • MSME sector has acted as a catalyst to bring about the socio-economic transformation of the country. Indian economy is likely to be a USD 5 trillion economy by 2025and the MSME segment has the potential to emerge as a backbone for this economy and act as an engine for growth, given the right set of support and enabling framework.
  • In Indian context, as per the DGCISdata, the value of MSME related products is 147,390.08 million dollars and share of MSME related products in the country exports was 48.56% during 2017-18.
  • The genesis of making Indian MSMEs global lies in providing them with a level-playing field to innovate, incubate and penetrate vis-a-vis the global arena. Today’s environment of global competition and challenges has prompted many countries to take steps to encourage MSMEs and in India, too, this has initiated the need to evaluate a strategy to enhance their overall capabilities and provide support to MSME sector.
  • MSMEs in India, with their dynamism, flexibility and innovative drive, are increasingly focusing on improved production methods, penetrative marketing strategies and modern scientific management capabilities to sustain and strengthen their operations. They are poised for global partnership and have the potential to absorb latest technologies in diverse fields. Indian MSME sector is a role model which many other countries like to replicate.
  • They play an important role in making India a manufacturing hub and “Make in India” campaign a success.
  • The need of the hour undoubtedly is to provide sustenance to enterprises in this sector through suitable measures which would strengthen them to convert the challenges into opportunities for scaling new heights.
  • We are focusing on providing MSMEs an enabling environment with overall aim of making India a manufacturing hub. Thus, the main objective of International Cooperation activity is to build the capabilities of Indian MSMEs by creating opportunities conducive for producing technical and business alliances like joint ventures, technology transfer, sub-contracting, exporting of products among Micro, Small and Medium Enterprises (MSMEs) of India and those of developed and developing countries. The overall emphasis is on developing sustainable business relations rather than one-way transactions with a focus to achieve Make in India objectives.
  • Ministry of MSME has been providing intervening platform at various stages to expose Indian MSMEs to international arena. Through its International Cooperation scheme, Ministry provides enabling environment to MSMEs by subsiding their visits to international exhibitions, Conferences and interactive business delegations to other countries.
  • The MSME-Technology Centres have provided at least 10 components that were used in the Mangalyaan (Mars Orbiter Mission). There is more such expertise in precision engineering waiting to be explored reinstating that the MSMEs still have a huge untapped potential.

  • Collaboration with Countries

  • Ministry of MSME has signed MoUs with different countries for facilitating SME cooperation in the sphere of trade, joint ventures, innovations and technology transfer, analysis of the business environment and ongoing trends in MSMEs development in the respective country and India. For instance, National Small Industries Corporation Ltd (NSIC) has entered into memorandum of understanding (MoU) with RSMB, Russia and PMEMAROC, Morocco to share best practices and create linkages facilitate, assist and provide necessary support to MSMEs of both the countries. NSIC has also signed MoUs with SME Corp, Malaysia and SBC, South to enhance cooperation in MSME sectors with these countries.
  • These MOUs have helped in creating right platform for MSMEs to have international exposure and access to international markets.
  • They have also resulted in encouraging bilateral programs of cooperation aiming at the development of business infrastructure and relevant services, such as incubators, clusters and soon.
    An India-Korea Technology Exchange Centre (IKTEC) was inaugurated by the Sh. Giriraj Singh, Hon’ble Minister of State (I/c), Ministry of MSME, Government of India and Mr. Jong Haak Hong, Hon’ble Minister of SMEs and Start-ups, Government of South Korea on July 10, 2018 at NSIC’s Technical Centre in New Delhi. IKTEC will assist Indian MSMEs and South Korean enterprises to form alliances to build their complementary competencies and be competitive in global market.
  • After knowledge, comes understanding. Providing International exposure and insight into international manufacturing practices Indian delegations led by high level dignitaries have visited various countries from time to time. Secretary (MSME) led a delegation of Indian MSMEs to participate in St. Petersburg International Exhibition in Russia in March 2018. He also led 16 member MSME delegation to Taiwan wherespecific one to one business meetings were organised for Indian MSMEs with their Taiwanese counterparts, Machinery manufacturers etc. Industry visits were also organised to expose them to Taiwanese manufacturing practices.
  • NSIC has also organised three Technology exchange Conferences with South Korea in New Delhi where business opportunities in both the countries were explained and one-on-one meetings were organised to build linkages amongst SMEs of South Korea and those of India.
  • Delegation of officials led by Sh. Giriraj Singh, Hon’ble Minister of State (I/c) for MSMEs visited Vietnam to initiate cooperation in MSME sector.
  • Delegation of 32 small and medium enterprises participated in 8th European SME Congress in Poland for establishing possible linkages with international partners. In order to fructify the opportunities for Indian SMEs, these visits provide an opportunity to make direct business relations between foreign and Indian SMEs.
  • Eyeing at increased cooperation in the Micro, Small and Medium Enterprises (MSME) sector, delegations from foreign countries including European countries and African countries have visited India holding high level talks with various industry bodies. For instance, French MSME delegation visited India in Sept2017 to expand the dialogue on economic cooperation between India and France by tapping on the Make in India initiative of the Government. Delegations visiting India have reinforced ties between India and foreign countries thus, proving to be instrumental in sharing expertise in different fields encompassing infrastructure, renewable energy and nuclear energy.
  • The lack of knowledge of global trade and overseas market scenarios make global trade an unknown territory for Indian MSMEs, and stepping into an unknown territory is a risk they cannot afford, and trying to gain knowledge is again a long and expensive process.
  • To give Indian MSMEs exposure of global market through participation in specialized product & technology related international exhibitions, an International Cooperation Scheme is implemented by the Ministry which helps MSMEs in showcasing their competencies and capturing market opportunities. Ministry of MSME facilitates the participation of small enterprises by providing them Stall rental and Airfare. It is interesting to note that a total of 51 exhibitions were supported by Ministry of MSME during 2017-18 witnessing participation of 723 entrepreneurs thus promoting entrepreneurship culture, aiding the MSMEs in enhancing their marketing avenues by way of capturing new markets and expanding existing markets.
  • NSIC has also been promoting Indian technologies and MSMEs by establishing Rapid Incubation Centres for creating self-employment opportunities in

  • Initiatives for Nurturing Indian MSMEs
  • To create a platform which could allow entrepreneur-to-entrepreneur exchange of ideas, free and fair business discussions, mutual sizing of opportunities and ways to address them, Ministry of Micro Small and Medium Enterprises has organised international events to pitch in deals for Indian enterprises with international giants.
  • Here are some of the recent events that have established Indian credibility in MSME sector in various countries

  • International SME workshop with IORA (19-20Jan, 2017)
  • The Ministry organised the International SME workshop at the Hotel Ashok, Chanakyapuri, New Delhi from 19-20Jan, 2017 with the objective to workout MoU amongst Indian Ocean Rim Association(IORA) member states- group of 21 member states and 7 dialogue partners for cooperation in MSME sector. The key highlights of the event featured the participation a total of 25 foreign delegates from 16 countries attending the event, in addition to the ambassadors, media persons, officials fromthe Ministry and its organisations and Ministry of External Affairs.

  • Global SME Business Summit 2018 (19-20 Dec, 2018)

  • The Ministry of MSME and Confederation of Indian Industry (CII) had organised the 15th edition of the CII Global SME Business Summit on 19-20 December 2018 in New Delhi. The theme of the Summit was ‘Building Partnerships through Global Value Chains'.

  • The Summit attempted to create a powerful agenda and bring together renowned speakers with unbounded experience and expertise, a global audience, and various national and international SME stakeholders to integrate Indian MSMEs into the GVCs.
  • International SME Convention (22-24 April, 2018)
  • Ministry of Micro, Small and Medium Enterprises, Government of India, in association with India SME Forum organized the first ever International SME Convention, with an objective to enable bilateral trade between International & Indian SMEs to enhance trade co-operation, collaborations, joint ventures and partnerships with Indian SMEs & offering a platform to International Entrepreneurs for collaborations and promoting Make in India as well as Made in India.
  • India has steadily shown a movement towards the top of the global innovation index whereas SMEs in India have consistently exposed technology as a barrier for sustainable growth. Technologies and Investments from Industrialised& developed economies have been at the base of China’s rise as a Manufacturing powerhouse in the world. The Ministry recognized this deep rooted requirement of Indian SMEs and has put in place a plan to invite, encourage and enable technological collaborations between Indian SMEs and International SMEs from the technologically advanced and innovative countries as outlined by the Industrialised economies have strengthened their SMEs to create a formidable industry pyramid with SMEs serving as the base and the real strength of their industries.
  • With the twin objective of offering a technology partnership platform and sharing best practices of developed SME economies, the International SME Convention 2018 (ISC 2018) was held between 22nd-24th April 2018 at Delhi, which was attended by 170+ International SME delegates from 39 countries and by over 400+ progressive SMEs from India. 11 States also participated at the Convention.

  • At the Convention, 198 trade Connect Forms were filed for business Matchmaking and JVs while 29 Letters of Intent & MoUs were signed of which 6 have materialised and given effect, and have translated into a business of 180 crores till date and expected to grow annually.

  • Post the ISC 2018, Countries like Poland, Czech Republic, Italy, Uzbekistan, Ghana, San Marino, Israel and USA have invited SME Business Delegations from India to their respective Countries.

  • First ever Khadi Fashion Show was organised at the International SME Convention 2018, which set precedence for 2 other fashion shows organised by KVIC - one at Lakme Fashion Week 2018 and later with Delhi Times of India Group

  • As a follow-up to the ISC 2018, & part of the outreach, the Hon'ble Joint Secretary SME at the Ministry of Micro, Small & Medium Enterprises (MSME) of the Government of India, successfully led a 32 Member Business Delegation, organised by the India SME Forum, to attend the 8th European Congress for SMEs 2018, held in Katowice, Poland from 17th - 19th Oct 2018. As an outcome of which, 5 companies have signed Agreements which received business orders from European Companies.
  • The International SME Convention was announced by the Hon'ble Secretary, as an annual platform, with the objective for enhancing and promoting intensive business discussion, trade co-operation, collaboration on Innovative / High Technology products and services, for International delegates interested in finding Partners or looking to penetrate Indian markets.
  • It aims to become a crucial platform for disseminating knowhow on assessing the export potential of the products and services of Indian MSMEs, identifying suitable markets, developing strategies to penetrate new markets through trade associations, multi-lateral agencies, international business forums and E-Commerce platforms.
  • CONCLUSION – Changing Paradigm

  • The advent of economic liberalisation in India paved a way for more than 700 technological collaborations between between small and medium enterprises from India and countries on the innovation axis. Successful collaborations were tracked with countries including Japan, USA, Canada, Israel, Singapore, UK & the European Union.

  • The time has come for India encourage our SMEs to take the front seat in collaborating and partnering with International enterprises to not only setup manufacturing operations for International counterparts but also to enable a multi pronged supply chain which will benefit millions of micro enterprises.

  • India has seen Many JVs and partnerships with large organisations including PSUs and it is now the focus of the Govt of India to enable platforms which will not only boost bilateral trade but also efficiently and integrate Indian MSMEs into Global Value Chains.