MSMEs can play a major role in making local products popular

Garima Singh New Delhi | Updated on June 25, 2020

Major hurdles Delay in approvals and lack of access to technology are some of the challenges faced by small and medium units   -  M_Moorthy

With the Vocal for Local theme capturing the imagination of the nation, the spotlight has also turned to Micro Small and Medium Enterprises (MSMEs) which can play a significant role in tapping the potential of local products.

Industry insiders said that in the coming days, their focus will be on manufacturing substitutes for those items that are predominantly imported. Eventually, they want to tap the export markets for these products.

Reduce import dependence

“Products made of carbon are imported from China in huge numbers. Our aim is to start manufacturing these products here. This Vocal for Local initiative is a boon for the MSME segment as not only will it reduce our dependence on other countries for imports but will also boost entrepreneurship in the country,” said Virendra Nagpal, Delhi President, Laghu Udyog Bharati (LUB), a pan India organisation representing micro and small industries.

“The reason that China always comes to our mind when we talk about imports is that the country is a manufacturing hub. Some of the products that we import from other countries are also manufactured in China,” said Nagpal.

In a bid to give a fillip to the local production base, the Khadi and Village Industries Commission (KVIC) has begun supplying products to the Central Armed Police Forces (CAPF) canteens in the country.

“The annual turnover of CAPF canteens is approximately ₹2,000 crore and the KVIC is expecting to get a major share of it. By supplying local/village industry products to these canteens, KVIC will add at least 30 lakh new members to its consumer base,” said VK Saxena, Chairman, KVIC.

Further, KVIC is focusing on strengthening the bamboo industry and units making handicraft items, agarbatti and handmade paper.

“The Ministry of Finance, based on our request, has increased the import duty on bamboo agarbatti sticks from 10 per cent to 25 per cent. India is importing bamboo agarbatti sticks worth ₹400 crore a year. This decision alone will help in creating at least two lakh new jobs in 8-12 months’ time as agarbatti making is part of the village industry. Besides this, thousands of bamboo growers will also benefit from this decision,” added Saxena. KVIC also plans to open Khadi outlets outside the country to promote products made using the indigenous handspun fabric. Boosting the production of honey that enjoys a good market in many countries such as the US, the UK, France and the UAE is also on its radar.

Tech drawback

However, the MSME sector faces challenges like delay in approvals and lack of access to technology, which have discouraged many new players from entering the sector.

Taking the technology drawback into consideration, the Federation of Indian Micro and Small and Medium Enterprises (FISME) is doing a study on identification of products based on three categories: Low-tech, medium-tech products and high-tech.

“Initially, we can encourage MSMEs to manufacture low-tech products as these items require less usage of technology and can be easily made in India; later, focus can be shifted to medium-tech and high- tech products. Also, to make these MSMEs flourish, there should be a higher duty protection and standardisation,” said Anil Bhardwaj, Secretary-General, FISME.

Published on June 25, 2020

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