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NITIसंधान
07 July 2025
• “NITI Aayog Report Charts Path to Boost MSME Competitiveness.” DD News, 2 May
2025
• “Smart Tech, Self‑Driving and Safety Features to Dominate Auto Industry by 2030:
Niti Aayog Report.” The Economic Times
• “Fintech Tools to Transform Medium Enterprises into Growth Engines: NITI.” Business
Standard, 26 May 2025
• “NITI Aayog Eyes $25 Billion Exports of Hand and Power Tools by 2035.” Mint, 22 Apr.
2025
• “NITI Aayog Lays Out a Roadmap to Support Medium Enterprises.” The Economic
Times, 26 May 2025
• “NITI Aayog Sees Bright Future for India in Power and Hand‑Tools Export.” The
Hindu, 3 July 2025
• “India’s Automotive Industry Contributes 7.1% to India’s Gross Domestic Product
Says NITI Aayog.” Business Standard, 15 Apr. 2025
Quarterly newsletter by Research and Networking (R&N) Division of NITI Aayog
The third edition of NITIसंधान underlines the
commitment of NITI Aayog, the premier think-
tank of the Government of India, to work towards
evolving the growth path of the Indian economy by
leveraging evidence-driven research and strategic
planning. Designed to act as a nexus for knowledge
and innovation, we stand at the vanguard of
policymaking to ensure sustainable and equitable
socio-economic growth.
In the last quarter, multiple research studies were published with a focus
on making the economy more competitive. The framework designed to
enhance the competitiveness of MSMEs in India using a cluster approach
is one such initiative which would enable Medium Enterprises to emerge
as a pillar of India’s industrial ecosystem and a key driver of the nation’s
long-term economic resilience. Another report on India’s hand & power
tools sector explores an export opportunity worth over $25 billion.
NITIसंधान, our quarterly newsletter and a flagship tool for disseminating
NITI’s research, reflects our commitment to transparency, knowledge
sharing, and collaborative engagement. We welcome your valuable
feedback to enhance its relevance and effectiveness, and to ensure it
continues to serve as a meaningful resource for the learning and growth
of all stakeholders.
Shri B.V.R. Subrahmanyam
CEO, NITI Aayog
Building on the momentum of the
10
th
Governing Council Meeting of
NITI Aayog—where the Hon’ble Prime
Minister urged each state to chart
its own “Viksit Rajya for Viksit Bharat
@ 2047” roadmap—NITI Aayog, in
collaboration with NCAER, convened
a half-day policy workshop with leading experts to explore
pathways for state-level fiscal reform and socio-economic
development.
The workshop underscored the importance of a robust,
data-driven framework to promote inclusive development
by expanding welfare coverage, reducing leakages, and
ensuring last-mile delivery. Through such initiatives, NITI
Aayog offers actionable, evidence-based solutions to
states, reinforcing its pivotal role in advancing cooperative
federalism in India.
NITIसंधान, our quarterly newsletter and flagship platform for
sharing NITI’s research, showcases the organisation’s efforts
in promoting cooperative and competitive federalism.
I hope this edition serves as a valuable resource for our
readers.
Shri Suman Bery
Vice Chairperson, NITI Aayog
SCAN this
QR to access NITI
publications
Enhancing Competitiveness of
MSMEs in India
Automotive Industry: Powering
India’s Participation in Global
Value Chains
Designing a Policy for Medium
Enterprises
Unlocking $25+ Billion Export
Potential - India’s Hand & Power
Tools Sector
Message from
Vice Chairperson
From the desk of CEO
About Research and Networking
(R&N) Division
NITI Spotlight: Ideas, Impact, Insights
To further strengthen and streamline the research work being
facilitated and undertaken by NITI Aayog, a separate Research
and Networking (R&N) Division was formed in 2024. The R&N
Division will oversee the development of a robust pipeline
of research studies, evolve a multi-pronged dissemination
strategy and foster a networking mechanism amongst
relevant stakeholders from the policy research ecosystem.
Ms. Anna Roy (Programme Director, Research and
Networking Division, NITI Aayog)
E-mail at pdresearch-niti@gov.in
National Data and Analytics Platform (NDAP) facilitates and
improves access to Indian government data by bringing
together datasets from across India's extensive administrative
landscape. It allows users to search, merge, visualise, and
download datasets easily.
Research Publications this QuarterCitations in Media
Scan this QR to
access the NDAP
Portal v
07 July 2025
Automotive Industry:
Powering India’s Participation
in Global Value Chains
Ishtiyaque Ahmed
Programme Director, Industry &
Foreign Investment Division
Co-Authors: Upendra Kumar
Gupta, Abhishek Mukherjee,
Bhadraksh Bhargav
I
ndia’s manufacturing sector has experienced significant growth since the
introduction of the Liberalisation, Privatisation, and Globalisation (LPG) reforms.
It currently contributes approximately 17% to the country’s GDP. Manufacturing
plays a pivotal role in driving economic development and industrial expansion.
Among its key contributors is the automotive sector, which alone accounts for
nearly 7% of India’s GDP. It is one of the most advanced, complex, and globally
integrated industries, operating through intricate Global Value Chains (GVCs). The
sector is also a leader in technological innovation and continuous advancement.
The global automotive industry is undergoing a major transformation, marked
by increasing integration of advanced technologies such as autonomous
driving and Advanced Driver Assistance Systems (ADAS). The global shift from
conventional internal combustion engine vehicles to electric vehicles (EVs),
including the development of hydrogen fuel cell technology, is significantly
reshaping market demand and product development priorities.
In this context, India’s
automotive industry has
made remarkable progress
over recent decades,
evolving from a supplier of
non-critical components to
a reliable exporter of critical
automotive parts. Despite
the advantage of low-cost
labour, the sector faces
significant challenges and
Voice of our
Researchers
continues to operate at a cost disadvantage compared to global peers. High raw material costs, depreciation, taxation,
and limited access to affordable financing, together, offset the labour cost benefit. At only 3 per cent, its contribution to
the global automotive value chain market share remains small. The limited global position of the industry is a reflection
of challenges with low investment in research and development (R&D), Inadequate infrastructure, limited access to
advanced global technology, inadequate marketing support, and a shortage of skilled labour. It is necessary for the sector
to receive policy attention and coordinated interventions to deepen its engagement with the global landscape.
Recognising the strategic significance of this sector, NITI Aayog has undertaken a project aimed at advancing India's
positioning in the global automotive value chain. As a part of this initiative, NITI Aayog held extensive field visits and
stakeholder consultations to formulate policy interventions. These interventions follow a focused approach in targeting
components based on their technological maturity and complexity, and components are systematically mapped into
strategic quadrants, which serve as a framework for guiding tailored policy actions. This targeted methodology helps
eliminate duplication of efforts, optimise resource allocation and maximise the overall impact of these interventions.
NITI’s report addresses the specific challenges and lays down a roadmap for propelling the growth of this
sector through tailored fiscal and non-fiscal interventions. These measures are designed to strengthen the
sector’s global competitiveness and deepen its integration into global value chains. Fiscal interventions
include support for operational and capital expenditures (Opex and Capex), skill development initiatives,
establishment of robust R&D ecosystems, cluster development, government-facilitated IP transfers, and
branding/ marketing support. Non-fiscal measures focus on fostering technology transfer and foreign
collaboration through joint ventures, enhancing the Ease of Doing Business (EoDB), exploring signing
Free Trade Agreements (FTAs),
supplier development and
discovery, flexible working hours,
and ensuring a mission-mode
execution strategy.
This multifaceted approach is
expected to reduce India’s cost
disability, boost production and
exports, and generate significant
employment opportunities,
ultimately fuelling the sustainable
growth of the Indian automotive
sector to achieve Vision@2030.
Scan this QR
to access full
report With a global trade market valued at ~$100 billion in 2022, projected
to reach $190 billion by 2035, the tools sector presents a significant
opportunity for India to enhance its export footprint, create millions of
jobs, and establish itself as a competitive player on the world stage.
As of 2025, hand tools account for $34 billion of the ~$100 billion market,
expected to grow to $60 billion by 2035. Power tools, including tools
accessories, predominantly electrical, constitute $63 billion and are
also projected to reach $134 billion by 2035, reflecting a balanced
growth pattern across both categories.
In 2025, India exports $600 million in hand tools, representing a 1.8%
market share, and $425 million in power tools, equating to a mere 0.7%
share. The report identifies a $25 billion export opportunity over the next
decade, achievable by targeting a 10% market share in power tools and
a 25% share in hand tools.
The decline in China’s cost advantage due to tariffs and rising
labour costs, coupled with India’s proximity to key markets and trade
agreements, positions the country favourably. However, realising this
potential requires overcoming a 14-17% cost disadvantage compared
to China, driven by higher structural costs and smaller operational
scales.
With multiple challenges facing the tools industry,
a strategic roadmap and policy interventions like
addressing cost disadvantages by rationalising
Quality Control Order (QCO) restrictions, reducing
import duties, simplifying export promotion capital
goods (EPCG) scheme, and reforming building &
labour regulations, scaling operations through world-
class clusters through PPP model, India can transform
its tools industry into a $25 billion export powerhouse
by 2035.
07 July 2025
Charting the Path to Viksit Bharat: Insights
from India Policy Forum ’25 Workshop
Unlocking $25+ Billion Export Potential
- India’s Hand & Power Tools Sector
NITI Aayog, in collaboration with NCAER, successfully conducted
a half-day policy workshop titled “Viksit Rajya for Viksit Bharat
@ 2047: Pathways to Fiscal Strength and Inclusive Growth.”
The workshop, held on June 28th, 2025, aligned with the vision
articulated by the Hon’ble Prime Minister at the 10th Governing
Council Meeting, urging states to chart their roadmap toward
a Viksit Bharat.
The workshop commenced with welcome remarks by Dr Anil
Sharma, Secretary and Operations Director, NCAER. Prof. Karthik
Muralidharan from the University of California set the ball
rolling with a talk on "A Human Development and Jobs Agenda
for Viksit Rajya". Shri Rajiv Gauba, Member, NITI Aayog, delivered
a special address on how real action for development has to
be state-driven for India to achieve the idea of Viksit Bharat,
and Shri Suman K. Bery, Vice Chairman, NITI Aayog, presented
the keynote address.
The first session, titled “Smart States, Sound Finances: Data-
Driven Fiscal Transformation,” chaired by Dr. Arvind Panagariya,
Chairman, Sixteenth Finance Commission featured a
presentation by Dr. Pravakar Sahoo, Programme Director, NITI
Aayog, followed by insights from Prof. Amartya Lahiri, University
of British Columbia and Prof. Pravin Krishna, John Hopkins
University.
The second session, titled “Equity by
Design: Data Roadmaps for Inclusive
Growth,” chaired by Dr. V.K. Paul, Member,
NITI Aayog, included a presentation
by Mr. Rajib Sen, Programme Director,
NITI Aayog, followed by Dr. Sam Asher,
Imperial College London, Prof. Namrata
Kala, MIT Sloan School of Management,
and Prof. Nirvikar Singh, Co-Director,
Centre for Analytical Finance, University
of California, expressing their views on
the same.
Share of Global Exports and Imports
of Power Tools
Share of Global Exports and
Imports of Hand Tools
Scan this QR
to access full
report Enhancing MSMEs’ Competitiveness in India
This report is structured into four key chapters, each designed to
deepen our understanding of India’s Micro, Small and Medium
Enterprises (MSMEs) competitiveness.
• Understanding MSMEs’ Challenges for Enhancing
Competitiveness
After thoroughly examining challenges like financial
constraints, technological gaps, skill shortages, and regulatory
hurdles, the chapter lays a foundation for identifying key areas
that require strategic intervention.
• Competitiveness Framework – MSMEs and the Path to
Prosperity
This framework charts a path to prosperity by emphasising
the role of Clusters—geographic concentrations of
interconnected businesses, suppliers, and institutions—which
are shown to foster efficiency, innovation, and adaptability.
• Understanding MSMEs’ Competitiveness in India Using the
Clusters Approach
The cluster approach is employed to comprehensively
understand the performance and dynamics of Small and
Medium Enterprises (SMEs) within the Indian economy.
These regions use cluster mapping as a sophisticated tool
for informing policy decisions and promoting cross-border
collaborations.
• Policies for MSMEs in India
The final chapter reveals that despite numerous policies, gaps
in awareness, stakeholder engagement, and adaptability
limit their impact. It concludes with recommendations for a
more robust, adaptive policy framework that responds to the
evolving needs of MSMEs, emphasising continuous monitoring,
feedback integration, and data-driven adjustments.
The report offers several actionable recommendations, like
enhancing the role of Non-Banking Financial Companies
(NBFCs) and the Small Industries Development
Bank of India (SIDBI) to improve credit flow;
addressing skill gaps by fostering partnerships
between government, industry, and educational
institutions; encouraging MSMEs to integrate into
global value chains by improving logistics, digital
connectivity, and trade infrastructure; Advocating
for affordable digital risk management and
insurance solutions, especially for MSMEs with
extended supply chains.
Medium enterprises are vital contributors to India’s GDP;
they contribute 40% of MSME export income and are more
innovation-driven than small and micro enterprises. Despite
immense potential and strengths, medium enterprises need
certain interventions to unlock their full potential. Through this
report, a policy framework will be designed that addresses the
specific needs of medium enterprises by analysing existing
opportunities and reviewing international best practices.
• Tailored financial initiatives for Medium Enterprises, allowing
them to apply for a loan at concessional rates at their local
retail banks and receive fast-tracked decisions.
• Technology integration in business operations by leveraging
the existing Technology Centres (TCs) under the Ministry of
MSME and revamping them into "India SME 4.0 Competence
Centres."
• R&D promotion for Medium Enterprises by utilising a
certain portion of the Self-Reliant India Fund for exclusively
financing Medium Enterprise projects.
• Enhancing MSE-CDP: integrating cluster-wise testing
facilities for Medium Enterprises
• Customised skill development initiatives for Medium
Enterprises by expanding the three components of the
Entrepreneurship Skill Development
Programme (ESDP) Scheme - a six-
week training programme, the One
Week Advanced ESDP programmes, and
the One Week Advanced MDPT training
Programmes.
• Centralised Portal for Medium Enterprises
as a sub-portal of the Udyam Portal,
which will ease access to information,
applications, and support schemes.
With a strategic and coordinated approach, the growth
trajectory of Medium Enterprises can be accelerated, enabling
them to emerge as a pillar of India’s industrial ecosystem and
a key driver of the nation’s long-term economic resilience.
07 April 2025
Designing a Policy for Medium Enterprises
Scan this QR
to access full
report
Scan this QR
to access full
report
%Share of MSME Unit
Employment Per Unit of MSME
NITIसंधान
07 July 2025
• “NITI Aayog Report Charts Path to Boost MSME Competitiveness.” DD News, 2 May
2025
• “Smart Tech, Self‑Driving and Safety Features to Dominate Auto Industry by 2030:
Niti Aayog Report.” The Economic Times
• “Fintech Tools to Transform Medium Enterprises into Growth Engines: NITI.” Business
Standard, 26 May 2025
• “NITI Aayog Eyes $25 Billion Exports of Hand and Power Tools by 2035.” Mint, 22 Apr.
2025
• “NITI Aayog Lays Out a Roadmap to Support Medium Enterprises.” The Economic
Times, 26 May 2025
• “NITI Aayog Sees Bright Future for India in Power and Hand‑Tools Export.” The
Hindu, 3 July 2025
• “India’s Automotive Industry Contributes 7.1% to India’s Gross Domestic Product
Says NITI Aayog.” Business Standard, 15 Apr. 2025
Quarterly newsletter by Research and Networking (R&N) Division of NITI Aayog
The third edition of NITIसंधान underlines the
commitment of NITI Aayog, the premier think-
tank of the Government of India, to work towards
evolving the growth path of the Indian economy by
leveraging evidence-driven research and strategic
planning. Designed to act as a nexus for knowledge
and innovation, we stand at the vanguard of
policymaking to ensure sustainable and equitable
socio-economic growth.
In the last quarter, multiple research studies were published with a focus
on making the economy more competitive. The framework designed to
enhance the competitiveness of MSMEs in India using a cluster approach
is one such initiative which would enable Medium Enterprises to emerge
as a pillar of India’s industrial ecosystem and a key driver of the nation’s
long-term economic resilience. Another report on India’s hand & power
tools sector explores an export opportunity worth over $25 billion.
NITIसंधान, our quarterly newsletter and a flagship tool for disseminating
NITI’s research, reflects our commitment to transparency, knowledge
sharing, and collaborative engagement. We welcome your valuable
feedback to enhance its relevance and effectiveness, and to ensure it
continues to serve as a meaningful resource for the learning and growth
of all stakeholders.
Shri B.V.R. Subrahmanyam
CEO, NITI Aayog
Building on the momentum of the
10
th
Governing Council Meeting of
NITI Aayog—where the Hon’ble Prime
Minister urged each state to chart
its own “Viksit Rajya for Viksit Bharat
@ 2047” roadmap—NITI Aayog, in
collaboration with NCAER, convened
a half-day policy workshop with leading experts to explore
pathways for state-level fiscal reform and socio-economic
development.
The workshop underscored the importance of a robust,
data-driven framework to promote inclusive development
by expanding welfare coverage, reducing leakages, and
ensuring last-mile delivery. Through such initiatives, NITI
Aayog offers actionable, evidence-based solutions to
states, reinforcing its pivotal role in advancing cooperative
federalism in India.
NITIसंधान, our quarterly newsletter and flagship platform for
sharing NITI’s research, showcases the organisation’s efforts
in promoting cooperative and competitive federalism.
I hope this edition serves as a valuable resource for our
readers.
Shri Suman Bery
Vice Chairperson, NITI Aayog
SCAN this
QR to access NITI
publications
Enhancing Competitiveness of
MSMEs in India
Automotive Industry: Powering
India’s Participation in Global
Value Chains
Designing a Policy for Medium
Enterprises
Unlocking $25+ Billion Export
Potential - India’s Hand & Power
Tools Sector
Message from
Vice Chairperson
From the desk of CEO
About Research and Networking
(R&N) Division
NITI Spotlight: Ideas, Impact, Insights
To further strengthen and streamline the research work being
facilitated and undertaken by NITI Aayog, a separate Research
and Networking (R&N) Division was formed in 2024. The R&N
Division will oversee the development of a robust pipeline
of research studies, evolve a multi-pronged dissemination
strategy and foster a networking mechanism amongst
relevant stakeholders from the policy research ecosystem.
Ms. Anna Roy (Programme Director, Research and
Networking Division, NITI Aayog)
E-mail at pdresearch-niti@gov.in
National Data and Analytics Platform (NDAP) facilitates and
improves access to Indian government data by bringing
together datasets from across India's extensive administrative
landscape. It allows users to search, merge, visualise, and
download datasets easily.
Research Publications this QuarterCitations in Media
Scan this QR to
access the NDAP
Portal v
07 July 2025
Automotive Industry:
Powering India’s Participation
in Global Value Chains
Ishtiyaque Ahmed
Programme Director, Industry &
Foreign Investment Division
Co-Authors: Upendra Kumar
Gupta, Abhishek Mukherjee,
Bhadraksh Bhargav
I
ndia’s manufacturing sector has experienced significant growth since the
introduction of the Liberalisation, Privatisation, and Globalisation (LPG) reforms.
It currently contributes approximately 17% to the country’s GDP. Manufacturing
plays a pivotal role in driving economic development and industrial expansion.
Among its key contributors is the automotive sector, which alone accounts for
nearly 7% of India’s GDP. It is one of the most advanced, complex, and globally
integrated industries, operating through intricate Global Value Chains (GVCs). The
sector is also a leader in technological innovation and continuous advancement.
The global automotive industry is undergoing a major transformation, marked
by increasing integration of advanced technologies such as autonomous
driving and Advanced Driver Assistance Systems (ADAS). The global shift from
conventional internal combustion engine vehicles to electric vehicles (EVs),
including the development of hydrogen fuel cell technology, is significantly
reshaping market demand and product development priorities.
In this context, India’s
automotive industry has
made remarkable progress
over recent decades,
evolving from a supplier of
non-critical components to
a reliable exporter of critical
automotive parts. Despite
the advantage of low-cost
labour, the sector faces
significant challenges and
Voice of our
Researchers
continues to operate at a cost disadvantage compared to global peers. High raw material costs, depreciation, taxation,
and limited access to affordable financing, together, offset the labour cost benefit. At only 3 per cent, its contribution to
the global automotive value chain market share remains small. The limited global position of the industry is a reflection
of challenges with low investment in research and development (R&D), Inadequate infrastructure, limited access to
advanced global technology, inadequate marketing support, and a shortage of skilled labour. It is necessary for the sector
to receive policy attention and coordinated interventions to deepen its engagement with the global landscape.
Recognising the strategic significance of this sector, NITI Aayog has undertaken a project aimed at advancing India's
positioning in the global automotive value chain. As a part of this initiative, NITI Aayog held extensive field visits and
stakeholder consultations to formulate policy interventions. These interventions follow a focused approach in targeting
components based on their technological maturity and complexity, and components are systematically mapped into
strategic quadrants, which serve as a framework for guiding tailored policy actions. This targeted methodology helps
eliminate duplication of efforts, optimise resource allocation and maximise the overall impact of these interventions.
NITI’s report addresses the specific challenges and lays down a roadmap for propelling the growth of this
sector through tailored fiscal and non-fiscal interventions. These measures are designed to strengthen the
sector’s global competitiveness and deepen its integration into global value chains. Fiscal interventions
include support for operational and capital expenditures (Opex and Capex), skill development initiatives,
establishment of robust R&D ecosystems, cluster development, government-facilitated IP transfers, and
branding/ marketing support. Non-fiscal measures focus on fostering technology transfer and foreign
collaboration through joint ventures, enhancing the Ease of Doing Business (EoDB), exploring signing
Free Trade Agreements (FTAs),
supplier development and
discovery, flexible working hours,
and ensuring a mission-mode
execution strategy.
This multifaceted approach is
expected to reduce India’s cost
disability, boost production and
exports, and generate significant
employment opportunities,
ultimately fuelling the sustainable
growth of the Indian automotive
sector to achieve Vision@2030.
Scan this QR
to access full
report With a global trade market valued at ~$100 billion in 2022, projected
to reach $190 billion by 2035, the tools sector presents a significant
opportunity for India to enhance its export footprint, create millions of
jobs, and establish itself as a competitive player on the world stage.
As of 2025, hand tools account for $34 billion of the ~$100 billion market,
expected to grow to $60 billion by 2035. Power tools, including tools
accessories, predominantly electrical, constitute $63 billion and are
also projected to reach $134 billion by 2035, reflecting a balanced
growth pattern across both categories.
In 2025, India exports $600 million in hand tools, representing a 1.8%
market share, and $425 million in power tools, equating to a mere 0.7%
share. The report identifies a $25 billion export opportunity over the next
decade, achievable by targeting a 10% market share in power tools and
a 25% share in hand tools.
The decline in China’s cost advantage due to tariffs and rising
labour costs, coupled with India’s proximity to key markets and trade
agreements, positions the country favourably. However, realising this
potential requires overcoming a 14-17% cost disadvantage compared
to China, driven by higher structural costs and smaller operational
scales.
With multiple challenges facing the tools industry,
a strategic roadmap and policy interventions like
addressing cost disadvantages by rationalising
Quality Control Order (QCO) restrictions, reducing
import duties, simplifying export promotion capital
goods (EPCG) scheme, and reforming building &
labour regulations, scaling operations through world-
class clusters through PPP model, India can transform
its tools industry into a $25 billion export powerhouse
by 2035.
07 July 2025
Charting the Path to Viksit Bharat: Insights
from India Policy Forum ’25 Workshop
Unlocking $25+ Billion Export Potential
- India’s Hand & Power Tools Sector
NITI Aayog, in collaboration with NCAER, successfully conducted
a half-day policy workshop titled “Viksit Rajya for Viksit Bharat
@ 2047: Pathways to Fiscal Strength and Inclusive Growth.”
The workshop, held on June 28th, 2025, aligned with the vision
articulated by the Hon’ble Prime Minister at the 10th Governing
Council Meeting, urging states to chart their roadmap toward
a Viksit Bharat.
The workshop commenced with welcome remarks by Dr Anil
Sharma, Secretary and Operations Director, NCAER. Prof. Karthik
Muralidharan from the University of California set the ball
rolling with a talk on "A Human Development and Jobs Agenda
for Viksit Rajya". Shri Rajiv Gauba, Member, NITI Aayog, delivered
a special address on how real action for development has to
be state-driven for India to achieve the idea of Viksit Bharat,
and Shri Suman K. Bery, Vice Chairman, NITI Aayog, presented
the keynote address.
The first session, titled “Smart States, Sound Finances: Data-
Driven Fiscal Transformation,” chaired by Dr. Arvind Panagariya,
Chairman, Sixteenth Finance Commission featured a
presentation by Dr. Pravakar Sahoo, Programme Director, NITI
Aayog, followed by insights from Prof. Amartya Lahiri, University
of British Columbia and Prof. Pravin Krishna, John Hopkins
University.
The second session, titled “Equity by
Design: Data Roadmaps for Inclusive
Growth,” chaired by Dr. V.K. Paul, Member,
NITI Aayog, included a presentation
by Mr. Rajib Sen, Programme Director,
NITI Aayog, followed by Dr. Sam Asher,
Imperial College London, Prof. Namrata
Kala, MIT Sloan School of Management,
and Prof. Nirvikar Singh, Co-Director,
Centre for Analytical Finance, University
of California, expressing their views on
the same.
Share of Global Exports and Imports
of Power Tools
Share of Global Exports and
Imports of Hand Tools
Scan this QR
to access full
report Enhancing MSMEs’ Competitiveness in India
This report is structured into four key chapters, each designed to
deepen our understanding of India’s Micro, Small and Medium
Enterprises (MSMEs) competitiveness.
• Understanding MSMEs’ Challenges for Enhancing
Competitiveness
After thoroughly examining challenges like financial
constraints, technological gaps, skill shortages, and regulatory
hurdles, the chapter lays a foundation for identifying key areas
that require strategic intervention.
• Competitiveness Framework – MSMEs and the Path to
Prosperity
This framework charts a path to prosperity by emphasising
the role of Clusters—geographic concentrations of
interconnected businesses, suppliers, and institutions—which
are shown to foster efficiency, innovation, and adaptability.
• Understanding MSMEs’ Competitiveness in India Using the
Clusters Approach
The cluster approach is employed to comprehensively
understand the performance and dynamics of Small and
Medium Enterprises (SMEs) within the Indian economy.
These regions use cluster mapping as a sophisticated tool
for informing policy decisions and promoting cross-border
collaborations.
• Policies for MSMEs in India
The final chapter reveals that despite numerous policies, gaps
in awareness, stakeholder engagement, and adaptability
limit their impact. It concludes with recommendations for a
more robust, adaptive policy framework that responds to the
evolving needs of MSMEs, emphasising continuous monitoring,
feedback integration, and data-driven adjustments.
The report offers several actionable recommendations, like
enhancing the role of Non-Banking Financial Companies
(NBFCs) and the Small Industries Development
Bank of India (SIDBI) to improve credit flow;
addressing skill gaps by fostering partnerships
between government, industry, and educational
institutions; encouraging MSMEs to integrate into
global value chains by improving logistics, digital
connectivity, and trade infrastructure; Advocating
for affordable digital risk management and
insurance solutions, especially for MSMEs with
extended supply chains.
Medium enterprises are vital contributors to India’s GDP;
they contribute 40% of MSME export income and are more
innovation-driven than small and micro enterprises. Despite
immense potential and strengths, medium enterprises need
certain interventions to unlock their full potential. Through this
report, a policy framework will be designed that addresses the
specific needs of medium enterprises by analysing existing
opportunities and reviewing international best practices.
• Tailored financial initiatives for Medium Enterprises, allowing
them to apply for a loan at concessional rates at their local
retail banks and receive fast-tracked decisions.
• Technology integration in business operations by leveraging
the existing Technology Centres (TCs) under the Ministry of
MSME and revamping them into "India SME 4.0 Competence
Centres."
• R&D promotion for Medium Enterprises by utilising a
certain portion of the Self-Reliant India Fund for exclusively
financing Medium Enterprise projects.
• Enhancing MSE-CDP: integrating cluster-wise testing
facilities for Medium Enterprises
• Customised skill development initiatives for Medium
Enterprises by expanding the three components of the
Entrepreneurship Skill Development
Programme (ESDP) Scheme - a six-
week training programme, the One
Week Advanced ESDP programmes, and
the One Week Advanced MDPT training
Programmes.
• Centralised Portal for Medium Enterprises
as a sub-portal of the Udyam Portal,
which will ease access to information,
applications, and support schemes.
With a strategic and coordinated approach, the growth
trajectory of Medium Enterprises can be accelerated, enabling
them to emerge as a pillar of India’s industrial ecosystem and
a key driver of the nation’s long-term economic resilience.
07 April 2025
Designing a Policy for Medium Enterprises
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%Share of MSME Unit
Employment Per Unit of MSME