The 27th day of June is commemorated as World MSME Day 2024 to acknowledge the contribution of Micro, Small, and Medium Enterprises towards the achievement of the United Nations Sustainable Development Goals.
However it is also important to recognize and appreciate the crucial role that MSMEs, often referred to as the backbone of our economic framework, play in shaping the Indian economy. These small and medium businesses are driving innovation, employment, and export growth. With over 63 million units, MSMEs contribute around 30% to India’s GDP and provide livelihoods for over 110 million people. It’s clear that they’re not just a segment of the economy, but a powerful force propelling India towards its ambitious goal of becoming a $5 trillion economy.
The theme for 2024 is “Leveraging the Power and Resilience of Micro, Small and Medium-sized Enterprises (MSMEs) to Accelerate Sustainable Development and Eradicate Poverty in Times of Multiple Crises”. For the MSMEs to be able to do that, the focus has to be on globalizing them, which is a vital step in unlocking their potential and ensuring sustained economic growth.
By venturing into international markets, adopting global best practices, and competing on a worldwide scale, Indian MSMEs can significantly expand their customer base and drive economic innovation. As we celebrate MSME Day 2024, let’s dive into the current trends, challenges, and success stories that highlight the transformative power of these enterprises in the global arena.
Globalization offers MSMEs the opportunity to broaden their customer base and tap into immense growth potential. While many Indian MSMEs currently operate within local markets, entering the global stage can lead to increased economic growth. Studies have shown that countries with higher levels of MSME internationalization tend to experience faster economic growth and innovation.
In recent years, we’ve witnessed a positive trend in MSME exports. Even during the pandemic, MSME exports in the fiscal year 2020-21 reached an impressive $290 billion, showcasing their resilience. The digital revolution is also playing a crucial role in globalizing MSMEs. E-commerce platforms and digital marketing enable small businesses to reach international customers.
According to a report by the Internet and Mobile Association of India (IAMAI), the digital economy is projected to reach $1 trillion by 2025. Additionally, the Indian government has launched various initiatives to support MSMEs in going global. The ‘International Cooperation Scheme’ provides financial assistance for participation in international trade fairs, and the ‘Make in India’ campaign promotes manufacturing and export-oriented growth.
Moreover, MSME Minister Jitan Ram Manjhi has unveiled the Trade Enablement & Marketing (TEAM) program, which will invest Rs 277.35 crore over three years (2024–2027) to enhance micro and small enterprises’ access to e-commerce through the Open Network for Digital Commerce (ONDC), the government’s open e-commerce network.
While the potential for MSMEs to drive economic growth is immense, they also face significant challenges. Many struggle to secure the necessary funds for expansion due to a lack of access to finance. Inadequate infrastructure further hampers their ability to scale and compete globally. Additionally, a limited understanding of international markets can hinder their growth.
To tackle these challenges, capacity-building initiatives, such as training and development programs, can equip MSMEs with the skills needed to compete globally. Financial institutions must also create tailored financial products that provide easy access to finance for MSMEs.
Public-private partnerships are super important in helping small and medium-sized businesses (MSMEs) go global, and the India-US CEO Forum is a great example of this teamwork. The Forum has been working hard through NIHIT, a platform specifically for MSMEs and startups, to give Indian businesses the resources, guidance, and opportunities they need to succeed on a global scale.
They’ve already held two successful cyber capacity building workshops, and they’re hosting a third one now about artificial intelligence. These workshops are open to all MSMEs and startups and offer valuable insights and tools to help them navigate and thrive in international markets and break the barriers.
Their big goal is to get 10,000 MSMEs and startups on the NIHIT platform by the end of this year, which would make it the biggest MSME and startup ecosystem in the world. This isn’t just a regular milestone, though—it’s a game-changer that’s all about empowering Indian businesses to compete on the global stage.
By creating an environment where MSMEs can access international markets, learn from the best, and use cutting-edge technologies, NIHIT is setting things up for some major economic impact on a global level supported by Tata sons and MasterCard and co led by InMobi.
Infosys Technologies Limited is a perfect example of an Indian MSME that made it big on the global stage. They started in 1981 with just $250, and got their first client in the USA in 1983. They were the pioneers of the Global Delivery Model (GDM), which made it possible for them to efficiently provide IT services from India to clients all over the world. Fast forward to today, and Infosys is in a whopping 46 countries with over 200,000 employees, serving tons of Fortune 500 companies. Their revenue has skyrocketed from $200 million in 2000 to over $14 billion in recent years.
Another inspiring success story is InMobi, founded in 2007. By 2010, they’d made their first move into the North American market, and by 2011, they were considered a unicorn. In 2013, MIT recognized InMobi’s super-innovative technology as one of the most disruptive in the world. InMobi’s journey shows us just how much potential Indian MSMEs have to become global leaders through innovation and smart international expansion.
It’s not just a good opportunity for Indian MSMEs to go global, it’s necessary for a developed India. By giving our MSMEs the power to compete globally, we can drive economic growth, create jobs, and achieve sustainable development and take remarkable strides through our engineering talent, exports and leadership in consumer tech along with a renewed focus on manufacturing and Make in India.
With the right support and initiatives, MSMEs can lead the charge in helping India reach its $5 trillion economy goal with growth that’s truly inclusive and uplifts the last mile.
(The author is Global SVP, Chief Corporate Affairs & Public Policy Officer, InMobi; Views are personal)
