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Wednesday, September 4, 2019

Why We Need Our SMEs to make it global

India accounts for around 65 million SMEs, contributing 11% of GDP, 45% of total production and providing employment opportunities to over 100 million people. SMEs also play an important role in supporting large companies as a side unit and also helping to promote industry in rural areas and back. Therefore, it is not an exaggeration to say that SMEs are the lifestyles and economic lines of the economy. India is vibrant and financially needs a vibrant SME sector!

For one thing, these SMEs are needed now and later so sustainability is' another business. While our SMEs may not be trying to reach the global market for their products, other companies around the world are not keeping up, they know the potential of global markets and are keen to penetrate r markets, including India aggressively.

Now, how do SMEs get more business in a limited market? Reliance on the domestic market does not seem to be an option. At a world economic forum earlier this year, PM Modi stated that Make in India should Make India for India and the World. This not only allows the company to increase its cost economy, but also creates new business opportunities for the local SME ecosystem.

So what can SMEs do to become sustainable, win more 'business' and explore new business opportunities?

The simple thing is, this SME must explore the 'blue ocean', explore new markets, grow beyond its borders and become a global player. Being global not only helps companies grow their businesses in a variety of markets, they also provide companies with global competitiveness, which makes them more attractive to the local market. Moreover, these globally competitive SMEs will not only be ‘global’ but also grow local businesses by becoming part of the Make in India initiative.

There are many opportunities in the world trade arena. This is exactly what the producer needs. However, it is easier said than done. Despite its strong focus on Government and exports, only less than 1% of the total of 65 Million Indian SMEs currently engage in Global Trade. In addition, only a small proportion of foreign SMEs are internationally competitive and trade with India. This is a global trade problem.

There are barriers for SMEs to cross

These barriers include much reliable data in foreign markets, inability to contact potential overseas customers, unfamiliarity with export rules, procedures and documentation, lack of trained export staff to facilitate trade, difficulty understanding foreign business opportunities, inadequate access to foreign business opportunities financial exports etc. .

Some of these barriers relate to perceptions, some to the lack of knowledge and information, and some to the lack of holistic and end-to-end global trade solutions for SMEs.

When exporting to developing countries like India, lack of access to global trade opportunities, trade intelligence and market demand are important barriers to the growth of SMEs. This lack of information may have high implications. SMEs need to know about procedures, documentation, specifications, rules, regulations, standards etc. in their target countries or whether they are committing worse trade or product, rejected.

In addition, a lack of knowledge about export opportunities in the global market can lead to high marketing costs and opportunities for inaccurate and inadequate target markets. Finally, the lack of trade facilitation or access to global trade resources to assist in conducting transactions that would prevent SMEs from venturing into unexplored territories.

However, the good news is that there are obstacles, as well as enablers.

Technology is a great enabler

The government expects the promotion of SMEs to accelerate, with the aim of increasing the global supply chain. There are various trading rooms, trade promotion organizations and export promotion boards that assist SMEs for global trade. There are also organizations like the ECGC that assist with financial security and export credit guarantees.

Trade infrastructure, both physical and digital, has steadily increased over the past few years. This has led to digital growth, digital enablement and digital engagement among SMEs despite falling numbers.

Technology is another great enabler. Technology today empowers companies to gain valuable knowledge of global trade and to understand the trends and potential. The right technology application can open up a variety of ways

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