SMEs are the backbone of the Indian economy. As of 2013, SMEs collectively employed at least 42 million people in India. They are not only helping in growing more employment opportunities but also substantially growing Indian economy. The contribution of individual SMEs may seem small but collectively they have emerged as powerful players in the growth of the Indian economy. As the SMEs continue to grow, here are three key trends that are likely to have a strong impact on the growth of the Indian SME Sector in the coming years.
Financial Credit to SMEs
The financial institutions are focusing on making loans available to SMEs required for their growth. Let’s talk about some of them:
Impact of e-Commerce
E-Commerce platforms can help SMEs reach a pan-Indian customer base. Their products can be showcased without the need to invest highly in any distribution networks. Studies show that SMEs that have incorporated e-commerce as part of their sales model, are seeing higher revenues.
KPMG has collected the following facts from various sources that proves that e-commerce players are also focusing on SME growth. The e-commerce players are helping SMEs across Indian states connect to a larger and global audience.
SMEs Creating Jobs
SME sector’s ability to create jobs, especially in the rural sectors, is a key positive trend for the Indian SMEs who are estimated to add over 1.3 million jobs per year. The SMEs are contributing to an impressive manufacturing (18% YOY) and service (34% YOY) sector growth rate.
SME sector is expected to contribute towards GDP growth by adding more jobs and augment industrialization in rural India helping create a balanced socio-economic growth for Indians. It will be interesting to see its growth in the next 5 years.