Driving self-reliance for SMEs

While there are many challenges faced by SMEs in India's manufacturing sector, it is important to emphasise their role in achieving self-reliance, especially for national economic growth...

- Rajesh Shah

India’s manufacturing sector plays a vital role in driving economic growth and generating employment opportunities. Within this sector, Small and Medium Enterprises (SMEs) form the backbone of the Indian economy, contributing significantly to production, exports and innovation. The industry leaders in the manufacturing sector here are key contributors to a wide range of products. These products include consumer goods, industrial equipment and components and intermediate goods that cater to the domestic market and actively participate in global supply chains, helping our export competitiveness.

It is interesting to witness how, in India, SMEs in the manufacturing sector are breeding grounds for innovation. They have the agility and flexibility to adapt to market demands, experiment with new ideas and develop innovative products and processes. These enterprises play a crucial role in fostering indigenous research and development, thereby promoting technological advancement.

Challenges for SMEs

 Limited access to finance: One of the major obstacles faced by SMEs is the limited availability of affordable finance. Traditional financial institutions often perceive SMEs as high-risk borrowers, making it difficult for them to secure loans or investment capital. This hampers their ability to invest in technology, infrastructure and skilled labour, restricting their capacity for growth and innovation. Additionally, the rise in start-up culture has made investors disrupt the market to grow faster instead of assisting SMEs that are trying to develop a more secure and structured way of growing, making it even more difficult for these segments to sustain the competition.