Nitin Gadkari: Opportunity for Indian MSMEs as countries look to diversify their supplies out of China

Till March 2021, an amount worth Rs 2.46 lakh crore has been sanctioned under the Emergency Credit Line Guarantee Scheme, according to MSME Minister Nitin Gadkari.

Ease of Doing Business for MSMEs: MSME Minister Nitin Gadkari on Thursday underscored the opportunity MSMEs in India have to plug themselves into the global supply chains as countries look to diversify their supply out of China. “With global supply chain undergoing significant restructuring and countries looking to diversify their supply out of china, our MSMEs have a great opportunity of being integrated into these global supply chains,” Gadkari said. According to a survey covering over 150 companies in India by FICCI and Dhruva Advisors in December 2020, 69 per cent of the respondents expected global companies to exit China and move to India. For instance, Japan had added India and Bangladesh to its list of relocation destinations for enterprises moving their manufacturing sites from China to the Association of Southeast Asian Nations (ASEAN) countries, according to a report by Nikkei newspaper in September last year.

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Gadkari said during the pandemic, MSMEs were able to adapt to the changing circumstances and help India get back on a growth trajectory. “We took some steps in coming up with relief packages to help review the MSME sector. Early on itself, we announced a financial package of one lakh crore for reviving MSMEs that were affected by the lockdown,” the minister said during Amazon’s Smbhav event. Till March 2021, an amount worth Rs 2.46 lakh crore has been sanctioned under the Emergency Credit Line Guarantee Scheme, he added. Likewise, the government is setting up a Rs 10,000-crore Fund of Funds for MSMEs, which have good turnover, GST, and income tax record, to be given a rating for a 15 per cent equity support from the government on raising capital from stock markets.

Also read: Amazon announces $250M venture fund focusing on SMEs; aims to bring 1M offline retailers online by 2025

The minister stressed on e-commerce playing a definite role in helping Indian MSMEs succeed. “We need to ensure that digital transformation takes place that enables them to capitalise on this current opportunity. In parallel, there needs to be a greater focus on capacity building for MSMEs. This includes helping them with right inputs on design, manufacturing, maintaining product quality and scaling their business.”

Even as the government continues to encourage small businesses to leverage the e-commerce route for expansion, its own e-commerce marketplace project Bharat Craft is yet to take off despite more than a year and a half after the MSME Ministry had announced the portal. The government is looking to outsource the project to a private entity. Addressing an event organised by SME body India SME Forum in Mumbai last month, Gadkari had said, “We had multiple rounds of meetings with Government eMarketplace (GeM) as well…but now I have asked the portal to be outsourced to a private player. The better the portal performs, the better the commission private player will get. Also, an agency will be finalized, which will be responsible to deliver the project, because there are multiple issues that occur within the government while rules are also difficult.”

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