‘Enhancing MSMEs Competitiveness in India’ Report

May 3, 2025

The NITI Aayog has recently released a report titled ‘Enhancing MSMEs Competitiveness in India’. It was developed in collaboration with the Institute for Competitiveness, outlines strategies to unlock the potential of Micro, Small and Medium Enterprises (MSMEs) in India. The report identifies systemic reforms necessary in financing, skilling, innovation, and market access to boost MSME competitiveness.

Key Sectors Analyzed

The report identifies sector-specific challenges and opportunities.
Focus areas include:
- Textiles & Apparel
- Chemical Products
- Automotive
- Food Processing

Major Findings of the Report

Access to Finance

Improvement in formal credit access (2020–2024):
- Micro & Small Enterprises: 14% → 20%
- Medium Enterprises: 4% → 9%
Despite this, only 19% of total MSME credit demand was met in FY21.
Estimated credit gap: ₹80 lakh crore.
The CGTMSE (Credit Guarantee Fund) has expanded but requires restructuring for better reach and collaboration. The report calls for a revamped CGTMSE to bridge the credit gap. This includes enhanced institutional collaboration and targeted services to support MSMEs.

Skilling & Productivity

Large segments of the MSME workforce lack formal vocational or technical training.
This limits their productivity and scalability.

Innovation & Technology Adoption

Low investment in R&D and innovation weakens competitiveness.
MSMEs struggle with adopting modern technologies due to barriers like:
- Unreliable electricity,
- Poor internet,
- High tech adoption costs.
Many state schemes aimed at supporting technological advancements remain underutilized due to low awareness or access to resource.

Policy Recommendations

The report recommends cluster-based and adaptive policy approach at the state level.
It emphasises the need for consistent monitoring, better data integration, and improved stakeholder engagement.
Enhanced support through digital marketing training and partnerships with logistics providers is also recommended.

Focus on Growth Regions

The report marks the need for targeted interventions in high-growth regions, particularly in northeastern and eastern India. Developing platforms for direct market linkages can enhance MSME competitiveness.

« Previous Post Next Post »