Introduction

MSME Sector in India

Part 1

Introduction

The MSME sector contributes in a significant way to the growth of the Indian economy with a vast network of over 46 million units, creating employment of about 106 million people, manufacturing more than 6000 products, contributing about 45% to manufacturing output and about 40% of exports, directly and indirectly.

Introduction

It has been witnessed globally, that the MSME segment constitutes the mainstay for maintaining growth rates as well as employment generation rate and provides stability during economic downturns.

India’s GDP is expected to touch 8.5 %, with the country likely to be a USD 5 trillion economy by 2025.

To accomplish this, growth of the MSME sector will be paramount.

Introduction

Further, the progress of this sector is extremely critical to meet the national objectives of financial inclusion and employment generation across urban and rural areas in the country.

MSMEs can make significant impact in the area of indigenization, with both domestic and foreign companies investing in the ‘Make in India’ initiative. With the launch of this initiative, MSMEs will increasingly focus on securing investment and technical expertise from foreign firms, which on the other hand, would be willing to leverage existing networks / resources of the MSMEs to get higher returns on investment.

Introduction

It is essential, that as India embarks on a new wave economy, it adopt an MSME opportunity framework that will provide the necessary momentum to seize the opportunities created by the ‘Make in India’.

The new wave MSMEs should support the development of a conducive business eco system that enables and continuously supports business that are striving to deliver their products and services at a competitive price, both in domestic and international markets.

Introduction

It is imperative that the MSME sector develops in all areas of manufacturing and services sectors because each of these sectors will continue to be very relevant to the overall GDP growth as well as employment generation.

The MSME sector will act as a catalyst to bring about this socio-economic transformation.

The Indian 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.

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