MSMEs can play a significant role in reviving India's economic growth and making it self-sufficient amid the coronavirus crisis, a report said. However, more measures are needed for MSMEs to become a growth driver for the economy, Nomura Research Institute (NRI) Consulting & Solutions India said in its latest report. Three key parameters for the success of small businesses are financial stability, availability of skilled labour in MSME clusters, and market competitiveness of their products to both achieve import substitution as well as exports, it added.
"It becomes extremely important for the MSMEs to design, manufacture and sell products which the customers need. They need to be connected to a demand led environment, where their business strategy and processes are aligned to the changing market dynamics through a market-oriented strategy," Ashim Sharma, Principal & Division Head - Business Performance Improvement (Auto, Engineering & Logistics), Nomura Research Institute Consulting & Solutions, said.
According to World Trade Organisation (WTO) estimates, the global merchandise trade is expected to reduce by 13 per cent to 32 per cent in 2020 due to the coronavirus pandemic.
The Nomura report says that capability of supply, capability of demand capacity, cost competitiveness and customer perception are some of the key areas that need to be focused. The report also highlighted multiple manufacturing clusters across India to help create a conducive environment for development of small and medium enterprises, as identified by the United Nations Industrial Development Organisation (UNIDO).
In the past few weeks, Prime Minister Narendra Modi has called for making India self-reliant. "It is about creating strong enterprises in India. Enterprises that can become global forces. It is about generating employment. It is about empowering our people to come out and create solutions that can define the future of our country," Modi had recently said at an event.
Meanwhile, Indian economy came to a standstill over the last three months as a countrywide lockdown to stem coronavirus spread shuttered shops and factories alike, destroying consumption.