Only 39% of Indian SMEs have presence abroad: FICCI-Grant Thornton survey

While almost 90% of the respondents are looking to expand their business in th efuture, 97% Indian org looking to expand are wanting to do so in the next 3 years

Despite being the backbone of the country’s industrial economy, India’s micro, small and medium enterprises (MSMEs) hardly have a global presence. According to a FICCI-Grant Thornton survey on MSMEs in India, only 39% of the respondents export goods or had operations abroad.

It shows that while almost 90% of the respondents are looking to expand their business in the future and 97% of Indian organisations that are looking at expansion opportunities are targeting their expansions within the next three years. The survey, Integrating MSMEs with the Global Value Chain, was based on responses from over 100 MSMEs. There were also respondents who were only outsourcing some of their work to other countries, whereas a majority of them did not have any international presence.

The survey results point to the need for a greater role of the Government of India, as regulatory compliances and availability of finance have been identified as the primary constraint being faced by Indian industry.

In India, MSMEs constitute nearly 94% of the industrial enterprises in the economy. The sector contributes 36% of the total value of exports of the country and employs over 80 million people. The contribution of the MSME sector to the output of the country is 40% and to the GDP is over 8%. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector.

Only 31% of the respondents of believed that the government was playing a key role in enhancing competitiveness in their business areas, highlighting the need for the government to introduce policies and procedures to address this gap to foster further growth.

The respondents that were able to secure business with multinational corporations more than 80% identified quality and competitive pricing as the reasons for multinational corporations to collaborate with them, while regulatory requirements being the reason for only 3% of the respondents.

More than 60% of the respondents to whom the ethical trading practices were applicable responded that they were certified with their global partners for ethical trading.