Hindi (India)English (United Kingdom)

Centre for Global Competitiveness of MSMEs

About MSME Sector in India

The micro, small and medium enterprises (MSMEs) play a vital role in the Indian economy. Available data from the Ministry of MSME, Government of India reveal that 26.1 million enterprises that belong to the MSME sector in India employ close to 60 million people.  These units’ manufacture over 6000 products ranging from traditional to high-tech items besides rendering a wide variety of services. In terms of value, the MSMEs account for about 45 per cent of the aggregate manufacturing output and around 40 percent of total exports from the country. The MSME sector’s contribution in gross domestic product (GDP) of India is estimated to be in the range of 8 to 9 percent.

While Indian MSMEs form an important sector of the domestic economy, their performance in international market is far from satisfactory. Except for a few low-cost labour-intensive products such as textiles, gems & jewellery etc., the share of India in global export of goods is very low.  In products like auto components, pharmaceuticals, though India has done well in recent years, we still remain net importer of such goods. In many technology-based and R&D intensive products like electronics, IT hardware, telecom equipment etc., country’s high import-dependence is an area of serious concern. This reflects that Indian MSMEs, by and large, suffer from low global competitiveness.

In management literature, this low level of competitiveness, which is typical to small and medium enterprises (SMEs) operating in the emerging economies, is often described as the problem of “Missing Middle”.  It is widely believed that in emerging nations like India though the SMEs get prominence by their sheer number and political clout, their contribution towards overall industrial competitiveness of the country is rather low.  It is a fact that small and medium industrial units in India face numerous resource constraints (e.g. lack of finance, skill shortages, outdated technology etc.) that seriously hurt their growth potential and render them globally uncompetitive. Further, the unfriendly business environment with higher degree of compliance burden on the industries is making ‘doing business’ in India really tough for the MSMEs. This significantly reduces their competitive capabilities.

About the Centre

NITIE’s Centre for Global Competitiveness of MSMEs (CGCM) is the first of its kind research-cum-resource centre in India established with exclusive focus on competitiveness of micro, small and medium enterprises (MSMEs). The centre came into existence in the year 2014.

A vast network of government departments and institutions including the Ministry of MSME are supporting the cause of small and medium industries. But given the huge size of the sector and the complexity of their problems, the current efforts definitely fall short of their actual requirements. Moreover, there is an emergent need of tackling the problems of the MSME sector by integrating needs of the domestic economy with those of the global market. The Centre for Global Competitiveness of MSMEs (CGCM) at NITIE would attempt to provide a holistic solution to the MSME sector so as to make them domestically vibrant and globally competitive. This, in turn, would help India achieve the target of raising the share of manufacturing GDP to 25% by 2025, as set by the National Manufacturing Policy (NMP) 2011.

Indian MSMEs are facing numerous challenges like sub-optimal scale of operation, technological obsolescence, intense competition from overseas firms, increasing cost of capital and turbulent market scenario etc. But, in spite of many limitations, the country offers certain unique opportunities to the MSMEs. India’s economic reform measures with liberal trade policies now make it possible for MSME units to take part in a big way in international trade. But to succeed in a global market, the products manufactured by Indian MSMEs need to be “cost competitive” as well as “price competitive”. The domestic resource-based cost advantages may no longer render sustainable competitiveness. This has to be supplemented by technological innovation, higher supply chain efficiency and better marketing strategies. The use of intellectual property (IP) as a strategic tool for business development has to be adopted by Indian MSMEs. A few organizations like National Manufacturing Competitiveness Council (NMCC) and the MSME Ministry have been trying to address such issues. But given the fact that about 95% of 26.1 million Indian MSMEs are micro enterprises, there is a need to first ‘educate’ them and then ‘handhold’ for bringing in incremental improvements in their economic competitiveness. NITIE, being a national institution of higher learning with focus on the manufacturing sector is a perfect fit to play this role.

Recently, the Ministry of MSME has proposed to set up an MSME University in Andhra Pradesh. This has prompted other states like Odisha to demand similar institutions in their territory. While an exclusive university for MSMEs is a good idea, the resource constraint may prevent from their country wide expansion. In this background, this centre within an established educational institution like NITIE which is also recognized for its key role in “industry-academia collaboration” can be an excellent platform with less investment for undertaking research, training and service delivery for benefits of the MSME sector.

Objectives of Centre

The broad objective of the Centre is to create, accumulate and disseminate knowledge on diverse fields of competitiveness for enhancing economic competitiveness of Indian MSMEs.

The specific objectives of the Centre are as following:

v  Build talent pools for the MSME sector through awareness creation workshops, training programmes and field visits

v  Undertake pilot studies in select MSME clusters and industry groups

v  Undertake research in new and emerging areas of MSME competitiveness

v  Collaborate with leading international organisations/bodies working in the field of global competitiveness

v  Disseminate knowledge through conventional channels like seminars, conferences, roundtable as well as in a user-friendly ICT platform, and

v  Serve as a nodal resource centre on MSME competitiveness

Activities

1.        Subscribed the following electronic databases for use of NITIE faculty & students:

·         World Competiveness Yearbook (WCY) online, IMD, Switzerland

·         Capitaline Plus(till March 2016)

·         Gartner Database (along with Centre for Technology & Innovation Management)

2.        Organised field visits of NITIE students to Nasik Engineering Cluster (NEC)

3.        Organised an industrial tour to SM Auto Stamping Ltd., an export oriented MSME unit at Nasik

4.        Organised an interactive session (of NITIE students) with a senior executive from Mahindra & Mahindra Ltd. on “Implementation of Lean Manufacturing Competitiveness Scheme (of Ministry of MSME, GoI) by Mahindra & Mahindra”.

5.        Enrolled the Centre with MSME Virtual Clusters programme

6.        Sponsored “Practice Leaders Forum (PLF) 2015” event held at NITIE Mumbai during December 18-19, 2015. PLF is a bi-annual event jointly organised by NITIE and Production Operations Management Society (POMS), USA where MSMEs get an opportunity to share their operations related issues (success as well as pain areas) with larger industries and members of the academia

7.        Organised a one-day workshop on “Operations Excellence through Effective Leadership” for MSME units at Satara (Maharashtra).

8.        Held discussion meeting with the Manufacturers’ Association Satara (MAS) and visited select industrial units at Satara to identify the competitiveness challenges before the MSMEs of the region.

9.        Organised a talk on “Impact of Indirect Taxes on MSMEs with expectations from GST” by Prof. N. S. Govindan at NITIE Auditorium on 9th August 2016.

Members of the Centre

1.      Prof. (Ms.) Karuna Jain, Director, NITIE and Professor (Engineering Technology and Project Management)

2.      Prof. A. S. Binil Kumar, Asst. Professor (Economics & Strategy)

3.      Prof. Kanchan Joshi (Engineering Technology & Project Managememt)

4.      Prof. Ajay Kumar Panda, Asst. Professor (Accounting & Finanace)

5.      Prof. Utpal Chattopadhyay, Associate Professor (Economics & Strategy)

6.      Prof. Mainak Mazumdar, Centre Coodrinator & Asst. Professor (Economics & Strategy)

Contact Details

Centre Co-ordinator

Centre for Global Competitiveness of MSMEs (CGCM)

National Institute of Industrial Engineering (NITIE)

Vihar Lake,  Mumbai-400 087.

Tel: (022) 28573371

Fax: (022) 28573251

E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it