The small medium enterprises sector plays a significant role in the development of Indian economy.With the potential growth opportunities in MSME sector it is helpful in meeting the objectives of nation.
Indian economy is going through various ups and downs in the present scenario. The small medium enterprises sector plays a significant role in the development of Indian economy. It works as a development tool for socio economic transformation of the country. With the potential growth opportunities in MSME sector it is helpful in meeting the objectives of nation. These small-scale enterprises help in generating employment at low-skill level, reducing poverty, and discouraging rural-urban migration, all these are the good parts of SME sector in India. Additionally, small businesses is promoting the use of domestic resources in the production of household goods, textiles, chemicals, medicines, small industrial equipments, agricultural tools, beauty products, bags, etc. According to the reports of Ministry of Micro Small and Medium Enterprises, the small sized enterprises have shown massive growth in past few years, which is the result of increasing awareness about SME sector among the common man. But all this has been done in a constrained manner due to the lack of inefficient resource utilization. Although, there is a consistent growth and development in MSMEs, but inadequate financial resources is one of the primary factors that make these enterprises vulnerable, particularly in periods of economic downturn.
Moving further, SME's contribute nearly 8% of the country's GDP, 45% of the manufacturing output and 40% of the exports. This sector is the largest share of employment in India after agriculture and service industry. India is a big country and also considered as a great marketplace to the national as well as international clients. Looking at this, small medium enterprises are widely spread across the country and produce a diverse range of products and services to meet the needs of the local markets, the global markets. Government data states that SMEs Sector plays a major role in India's present export performance. On around, 45%-50% of the Indian Exports is contributed by the SME sector. Besides direct exports, it is estimated that small-scale industrial units contribute around 15% to exports indirectly. They are the great opportunities for entrepreneurship and innovation. The exports from SMEs sector have shown excellent growth rates in this decade. The products which are the major exports from SMEs sector include garments, woolen clothes, knitwear, plastic products, leather goods, processed food, packaged food and sports goods.
The Indian export have gained a rise to $300.6 Billion in 2012-2013 from $63.8 Billion in 2003-2004, providing employment to about 12 Lakh of people from rural background. To promote this, Indian economists have come up with the idea of Free Trade Agreements (FTAs), which was successfully implemented to sought out good results in the SME sector and to increase our market share across the globe. Following the objective of trade diversification, India has signed Trade in Goods Agreement with ASEAN nations. It is done for the future of Indian small medium enterprises. Creating new business relations at the global front, Indian Government expect to achieve good results in economic development. All these initiatives are taken to maintain long term healthy relationships between the group of buyers and sellers. These factors contributes a lot to expose Indian exporters in the global marketplace, so that they brought in immediate and effective results to the nation.