Integration of Indian MSMEs with Global Value Chains Seen Crucial: Govt Rolls Out New Policies

The Government of India has underlined the critical importance of integrating Micro, Small and Medium Enterprises (MSMEs) with global value chains, recognising their role in driving economic growth, job creation, and enhancing the country’s competitiveness in international trade.

Responding to a question in the Lok Sabha, the Ministry of MSME highlighted both the challenges faced by Indian enterprises in global markets and the policy measures being rolled out to strengthen their participation.

MSMEs in India, despite their resilience and contribution to the national economy, continue to face structural barriers when attempting to access international markets. Among the key challenges identified are limited access to information about global demand and supply trends, difficulties in securing affordable finance, low levels of formalisation, and inadequate investment in research, development, and innovation.

Global economic factors such as fluctuating demand, technological disruptions, and sustainability requirements further impact their growth and long‑term viability.

To address these concerns, the government has launched a series of initiatives aimed at building capacity, improving competitiveness, and facilitating access to international markets. The International Cooperation (IC) Scheme is one such measure, designed to help MSMEs enter the export market.

Through its Market Development Assistance component, financial support is provided for participation in international fairs and exhibitions, as well as for organising global conferences in India. The scheme also includes reimbursement for first‑time exporters covering costs such as export insurance premiums, testing and quality certification, and registration with export promotion councils.

Complementing this, the Ministry has established 65 Export Facilitation Centres (EFCs) across the country. These centres act as dedicated support systems, disseminating information on schemes, linking MSMEs with financial institutions includingNBFCs and fintech start‑ups, and helping them access credit at competitive rates.

The government has also introduced the MSME Champions Scheme, which integrates three sub‑schemes: the Sustainable (ZED) Certification Scheme, the Competitive (LEAN) Scheme, and the Innovative Scheme covering incubation, design, and intellectual property rights. Together, these initiatives aim to unify and converge various interventions to make MSMEs globally competitive.

Further, the Raising and Accelerating MSME Performance (RAMP) Scheme provides support for technological upgradation, market access, and credit availability by strengthening central and state agencies.

Recognising the importance of sustainability, the Ministry has launched the Green Investment & Financing for Transformation (GIFT) Scheme and the Scheme for Promoting Investment in Circular Economy (SPICE). These programs encourage MSMEs to adopt eco‑friendly practices, renewable energy sources, and circular economy models.

In addition, the Trade Enablement and Marketing Initiative (TEAM) has been introduced to provide micro and small enterprises access to digital marketing platforms.

Sector‑specific support is also being extended. The Coir Board’s Coir Vikas Yojana promotes exports through targeted activities, while collateral‑free credit is facilitated through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), with the guarantee limit raised to ₹10 crore.

The government has also revised the criteria for classification of MSMEs, widening the ambit of the sector. Under the new thresholds, micro enterprises are defined as units with investments up to ₹2.5 crore and turnover up to ₹10 crore, small enterprises with investments up to ₹25 crore and turnover up to ₹100 crore, and medium enterprises with investments up to ₹125 crore and turnover up to ₹500 crore.

Formalisation of enterprises remains a priority. The Udyam Registration Portal facilitates online registration, while the Udyam Assist Platform brings informal micro enterprises under the formal ambit, enabling them to access priority sector lending and other benefits.

In comparison to other major economies, Indian MSMEs are acknowledged to be less advanced in terms of productivity, innovation, and ease of doing business. However, the government spotlighted that Indian MSMEs have shown resilience and adaptability, and with the ongoing push for digitalisation, technological upgradation, financial inclusion, skill development, and green manufacturing, they are being positioned as key players in global value chains.

Looking ahead, the Ministry’s strategy is to build competitiveness through sustainability, innovation, and integration with international markets. By addressing structural challenges and leveraging new policy frameworks, the government aims to ensure that Indian MSMEs not only survive global competition but also emerge as significant contributors to international trade.

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