The manufacturing sector in India has the potential to become a trillion dollar industry by 2020. With the support of the government initiatives such as Make in India & Digital India and the innovation in technology, SMEs have a great prospect to cash-in on the opportunity, says Umesh Modi.

 

SMEs are often referred to as the heart and soul of Indian economy. This goes to show that the growth of SMEs is an integral part of the growth of our economy. There are close to 50 million SMEs in India today, operating from the remotest places of the country, striving to grow. Due to various government initiatives, entrepreneurs of all ages and backgrounds have now taken a step towards achieving their dreams. Be it a college student, a housewife or an executive who has just quit his/her job to follow his dreams, entrepreneurship is accelerating.
 

Unemployment is another reason why people often opt for their own ventures. However, starting a business is not going to help the economy. The business has to sustain and grow in order to contribute to the growth of the country. So how do SMEs sustain instead of heavy competition? How do they mark their presence when there are industry giants who have captured a good percentage of the market?  

The answer is Internet! Entrepreneurs don’t lack passion or perseverance but one thing they do lack is resources. It will be impossible for them to survive when MNCs are spending billions on marketing to reach their target audience. With the increase in the number of Internet users across the globe, entrepreneurs have now started selling their goods and services online. E-commerce is no longer restricted to tangible products or B2C sellers. B2B buyers and sellers have found a fast and convenient way to trade products and services online. 

E-commerce is a boon for SMEs. It’s the future! E-commerce has great potential for all businesses. Everything is online and that’s where the SMEs need to be. Small and medium enterprises that manufacture goods sitting in a small city in India are now able to send their products to buyers from abroad. There always has been great demand for Indian spices, handicrafts etc. E-commerce has helped bridge the gap between the sellers and potential buyers across the globe. E-commerce has made the transaction seamless. 
 

E-commerce is undoubtedly the best bet for SMEs especially manufacturers. The Internet provides a great opportunity to them. It is also beneficial for them as the promotional cost of promoting one’s business online is nowhere near what MNC’s spend on marketing through the means of traditional media. As everyone is on the web, it has become really easy, fast and cost-effective to reach your potential customer and get business. It also helps you source products, so it is also relevant for SMEs that are acting as third-party for big companies.
 

Although e-commerce has huge potential, there is going to be some legal friction. In order for manufacturers to be online especially for international buyers, it requires a solid Internet infrastructure. They need high-speed Internet to succeed in online space. Not to mention legal framework and tax benefits. The other major challenges faced by small and medium manufacturers are meeting the quality of international and national branded products. They also lack funds and are not aware of international business practices. Further, the procedures to start a business and export the products are complicated and time-consuming. Without government support, the small enterprises cannot succeed.
 

The government understands this and has already started its efforts towards digital India. Be it providing uninterrupted access to the Internet or the Make in India initiative, the government is trying to help the SMEs prosper in our country. 

 

Make in India and Digital India

As we are all aware of the ‘Make in India’ initiative started by Prime Minister Narendra Modi for the development of the country and to help the manufacturing sector in India. It is undoubtedly the best initiative started by the government in the Indian history. 
 

With this initiative, they look to promote various sectors. Infrastructure is obviously one of these sectors. Infrastructure is necessary for the growth of any country. The government is working on creating smart cities and high-speed communication Also, having high-tech manufacturing hub will contribute the development of the country. Apart from infrastructure, the government is also promoting railway, pharmaceutical, construction, and defense industry. Other segments are also expected to benefit from this initiative. 
 

Manufacturing in India will help us create employment opportunities. Most youngsters often go to other countries with the hope of being successful. SMEs have proved to be the highest employment-generating sector. It will create employment not only for engineers and managers but also for the uneducated people. It will help create jobs for every class, individuals from all social backgrounds which in turn will help Indian economy. Apart from this, what attracts the young minds is the opportunity to start their own venture. Manufacturing goods in-house will also help us meet the demands of the emerging consumer class in India. 
 

E-commerce has an added advantage for small manufacturers as it can help sell their manufactured products online and saves the humongous cost of investing in retail stores. It will also attract foreign direct investment which will give rupee a better chance to compete with the foreign currencies. As this initiative will also help SMEs get access to world-class technology. This will help the SMEs gain the required knowledge at the same time provides them with an added advantage over the competition. It is a win-win as the companies investing in India will get skilled labor. The best part of this initiative is that Indian capital will remain within the country and foreign currency will also come to India through the means of FDI. All of these things will help increase the quality of life for average Indian families along with the GDP of the country. 
 

Another such step taken by the government which will help the manufacturing sector bloom is Digital India, an initiative is taken to push digitisation in the country. The campaign looks to achieve digital delivery of government services (E-governance) and Internet connectivity in rural areas. It is a game changer for the country. It promotes the IoT (Internet of Things) idea for Indian economy especially the rural economy. The best example of the success of this initiative can be seen in the business sector of India. Digitisation provides the small and medium businesses with new market opportunities and gives them a competitive advantage. It has helped many SMEs create a name for themselves. With benefits such as virtual conferences, digitisation and digital literacy push for India the government has created a success path for SMEs (in both urban and rural areas). Digital technology has various tools such as cloud, mobile apps, social media, etc that help the businesses expand and improve their products and services. It also opens the gate of the global market for them and allows them to cater to a larger market.

 

Manufacturing sector by 2020

India is on its way to become the nerve center for hi-tech manufacturing for global biggies. India is the second largest population in the world, in other words, it has a huge market with billions of potential customers whose purchasing power is increasing every day. The popularity of India among foreign investors especially in manufacturing of mobiles and automobile sector is increasing day-by-day.

As the government is pushing for development of smart cities and the GDP of the country, it will ensure a flourishing environment for advanced practices in the manufacturing sector, making India the next big thing. This will help attract more FDI.
 

The manufacturing sector in India has the potential to become a trillion dollar industry by 2020. It is also expected that with the help of Make in India and Digital India, India will rank among the top 5 manufacturing destinations. 
 

This is a great opportunity for traditional Indian businesses as they have a new found way to get more business. With the support of the government initiatives such as Make in India and Digital India and the innovation in technology, SMEs all over India now have a real shot at success. They can and should be a part of this evolutionary initiative. The times are great and they should cash-in on the opportunity.

 

Umesh Modi is the Founder, Chairman and Managing Director of Jupiter Infomedia Limited. In the past 12 years, Modi has been actively looking into the operations of the company and has made every effort for its overall growth. Modi has capitalised the profits of the company thereby gradually increasing its size.