An Opportunity to Transform the MSME Sector

Despite an impressive threefold growth over the past four years, the number of MSME exporters in India stood at only 1,73,350. When compared to the strong base of 7.3 crore MSMEs, this figure represents a mere 0.23%.

The majority of MSMEs in India are micro enterprises, and many of them operate in the informal sector. Their scale of business is limited, and they often lack access to modern technology. Moreover, their structural setup is such that they are unable to meet the requirements of Global Value Chains (GVCs) in key sectors, which involve complying with complex international certifications.

Additionally, the ability to implement modern inventory management models such as ‘Just-in-Time (JIT) and Lean Manufacturing’ is crucial — and this requires digital technology and reliable logistics. Integration with Industry 4.0 tools is equally important.

For India, a real opportunity will emerge only when this vast but inactive base can be transformed into a formal, GVC-ready supplier pool. To capitalize on this opportunity, India must move beyond general welfare schemes and focus on targeted, execution-driven interventions.

At the same time, technology is meaningless without skilled workers. India urgently needs to launch training programs that provide skills relevant to GVCs — such as quality inspection, digital operations, machine maintenance, and supply chain management.

In addition, shared testing and certification centers must be established in the manufacturing sector. These centers will help small enterprises reduce the cost of compliance and build greater buyer confidence.

India must act swiftly and decisively to empower the remaining 99.76% of its MSMEs. To become the manufacturing hub of the world, the country needs not just intent, but also hard work, focus, and large-scale coordinated action.

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