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Indian micro, small and medium enterprises (MSMEs) are set to be global disruptors in textiles, clothing, machinery and electrical equipment sectors, as per a report by Empower India, a policy think tank.
The report stated that e-commerce has enabled the digital transformation of MSMEs at minimal cost and investment while also contributing to their presence across markets.
It is estimated, products such as wood, hides and skin, rubber and plastics and food and animal products, will witness an export hike of over 60 per cent by 2027, with MSMEs having more than 10 per cent of the market share for food and animal products.
The report took into consideration the market demand index, calculated for the years 2017 and 2022, to analyse the country’s export competitiveness.
It suggested that 34.75 per cent of commodities witnessed an increase in demand between 2017 and 2022, with the chemical sector having the highest number of commodities (79 commodities with rising global market demand).
Metals, vegetables, textiles, clothing, machinery and electrical equipment sectors were among the other top product categories with rising global demand.
It added, “USA, Turkey, Germany, UAE and Japan were among the top markets for exporting vegetable plaiting materials, edible preparations, iron and steel and aluminium articles.”
Also, the report revealed that 34 per cent of products received RCA greater than one, accounting for India’s comparative advantage in exporting across industries such as carpets, textile floor covering, vegetable products, resins, vegetable textile fibres and sugar confectionery, among others.
The report also measured the relative trade advantage (RTA) to evaluate India’s competitiveness in trade while also accounting for imports.
A total of 53.31 per cent witnessed a positive RTA across categories such as coffee, tea, mate, and spices, among others.
K. Giri, Director General, Empower India, said, “E-commerce is playing a critical part in reviving the hopes for MSMEs. We wanted to ascertain which sector could benefit more by reaching out to specific markets which is the essence of this report.”
Indices like export potential indicators and global trade analysis projects were used to identify potential target markets for commodity exports by Indian MSMEs. USA, UAE, China, Bangladesh, and Hong Kong were among the top markets for India, accounting for 37 per cent of the total exports.
Import growth estimates for the UAE and China, on the other hand, were around 50 per cent, the highest among India’s destination markets with the most untapped potential, followed by the UK with estimated growth of 46 per cent by 2027.
Sumathi Chakravarthy, Managing Director, Infinite-Sum Modeling said, “There is enough data to suggest that Indian MSMEs will be the global disruptors owing to the wide market spread they can cover. By exporting items such as metals, textiles, clothing, machinery, and electrical equipment to USA, Germany, UAE, and Japan, among others, the Indian MSMEs can leverage and contribute to the USD two trillion export market opportunity.”
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