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Overview of Indian SME - ADDVALUE Lean Consulting Firm

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An overview of SME's in India, Why are Indian SEM's Crucial! Find the Reasons for Small & Medium Enterprise(SME) Growth and details about Manufacturing Sectors. The opportunities exists for foreign SMEs looking to expand in the Indian market. – PowerPoint PPT presentation

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Updated: 29 January 2016
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Title: Overview of Indian SME - ADDVALUE Lean Consulting Firm


1
SME OVERVIEW INDIAN CONTEXT
By Nilesh Arora Founder Partner, ADD VALUE
Consulting Inc. ,INDIA
Adding Value In Totality !!
2
WHAT ARE SMES ?
  • Manufacturing Enterprises Investment in Plant
    Machinery Description
  • Micro Enterprises up to 62,500
  • Small Enterprises above 62,500 up to 1.25
    million
  • Medium Enterprises above 1.25 million up to
    2.5 million
  • Service Enterprises Investment in Equipment
    Description
  • Micro Enterprises up to 25,000
  • Small Enterprises above 25,000 up to 0.5
    million
  • Medium Enterprises above 0.5 million up to
    1.5 million

3
WHY ARE SMEs CRUCIAL ?
  • SME sector of India is considered as the backbone
    of economy contributing to 45 of the industrial
    output
  • 40 of Indias exports, employing 60 million
    people, create 1.3 million jobs every year and
    produce more than 8000 quality products for the
    Indian and international markets
  • With approximately 30 million SMEs in India, 12
    million people expected to join the workforce in
    next 3 years and the sector growing at a rate of
    8 per year

4
WHY ARE SMEs CRUCIAL ? contd
  • Several factors that have contributed towards the
    growth of Indian SMEs
  • Funding of SMEs by local and foreign investors
  • New technology in the market is assisting SMEs
    add considerable value to their business
  • Various trade directories and trade portals
  • Despite of this strong growth, there is huge
    potential amongst Indian SMEs that still remains
    untapped

5
VARIOUS MSME SECTORS
6
WHY ARE INDIAN SMEs CRUCIAL..?
  • SMEs are the major source for entrepreneurial
    skills, innovation and employment, after
    agriculture
  • After agriculture, SMEs are the second largest
    employer of human resources
  • Number of people employed in SMEs has grown to
    approx. 75 million at a growth rate of 5.5
  • 45 of the SMEs are in rural areas while 55 of
    the SMEs are in urban areas

7
IMPORTANT DATA SMEs(2013-14) contd
  • 67 of the SMEs are in manufacturing sector, 17
    in service sector and 16 in repairs and
    automation
  • SMEs make up for 80-90 of all enterprises and
    generate about 50-80 of total employment in
    developing Asia

8
IMPORTANT DATA SMEs(2013-14) contd
9
IMPORTANT DATA SMEs(2013-14) contd
10
REASONS FOR SME GROWTH
  1. Low investment
  2. High contribution to domestic production
  3. Significant export earnings
  4. Capacity to develop indigenous technology
  5. Operational flexibility
  6. Contribution to defense production
  7. Technology oriented industries
  8. Import substitution
  9. Location wise mobility
  10. Low intensive imports
  11. Competitiveness in domestic markets
  12. Competitiveness in export market

11
SMEs.. Manufacturing Sector
  • The various types of SMEs in manufacturing are
    textiles, machinery, plastics, auto components,
    rubber, foundries, paints, electrical, automation
    etc.
  • SMEs contribute to 40 of total exports
  • Form 95 of the total industrial units
  • Manufacture 8000 quality products for Indian and
    international markets
  • CHALLENGES
  • Manufacturing SMEs in India are also facing a
    number of problems like.
  • Sub-optimal scale of operation
  • Technological obsolescence
  • Supply chain inefficiencies
  • Increasing domestic global competition
  • Working capital shortages payment delays and
    Insufficient skilled manpower
  • Change in manufacturing strategies and turbulent
    and uncertain market scenario
  • OPPORTUNITIES
  • There lies a huge opportunity in terms of
    technological advancement, financial assistance,
    manufacturing competitiveness, innovation,
    infrastructure development etc. 

12
SMEs - SERVICE SECTOR
  • CSO (Central statistics organization) of India
    has classified servicesector into 14
    classifications they are1) Trade, hotels and
    restaurants (THR)
  • 2) Trade3) Hotels and restaurants4) Transport,
    storage and communication5) Railways6)
    Transport by other means7) Storage8)
    Communication9) Financing, Insurance, Real
    Estate and Business Services10) Banking and
    Insurance11) Real Estate, Ownership of Dwellings
    and Business Services12) Community, Social and
    Personal services13) Public Administration and
    defense (PA D)14) Other

13
SMEs - SERVICE SECTORcontd
  • Employment-intensity is highest in
    manpower-intensive services like security
    agencies, housekeeping, and facility management.
  • CHALLENGES
  • SME Sector is a handicap, despite of commendable
    contribution to nations economy
  • Absence of adequate and timely banking finance
  • Ineffective marketing strategy
  • Constraints on modernization expansions
  • Non availability of highly skilled labor at
    affordable cost
  • Follow-up with various government agencies to
    resolve problems etc.
  • OPPORTUNITIES
  • There lies a huge opportunity in terms of
    available skilled and unskilled manpower

14
SMEs AGRICULTURE SECTOR..
  • The various types of agriculture sector SMEs are
    inputs and technology providers, producers
    (farmers), logistics trade and distribution,
    processors, wholesalers and retailers.
  • CHALLENGES
  • Fragile internal control systems
  • Poor management culture
  • Corruption and security risks
  • Lack of skilled workers and reliable
    infrastructure
  • The most significant barriers common are lack of
    access to financing and to markets.
  • OPPORTUNITIES
  • Addressing the lack of access to financing and
    to markets is instrumental to unlocking the
    potential of SMEs as engines of domestic growth.

15
Agriculture Value Chain
16
OPPORTUNITIES IN INDIAN SMEs..
  • India is among the three most attractive FDI
    destinations in the world
  • One of worlds leading technology centers
  • India has highest return on foreign investment in
    the world
  • By 2032, India will be among the three largest
    economies in the world
  • India is a developed country as far as
    Intellectual Property is concerned
  • The Indian market has two core advantages an
    increasing presence of multinationals and an
    upswing in the IT exports.
  • In order to enable SMEs get easy access to the
    finance, government has also introduced priority
    sector lending and has made mandatory on the
    domestic and foreign banks to lend 40 and 32 of
    their Net Bank Credit (NBC) to the SMEs
  • The opportunities exists for foreign SMEs looking
    to expand in the Indian market in the field of
    technology transfer, setting up the new business
    in the country, obtaining the sub-contracting
    rights, out-sourcing to their Indian partners
    etc.

17
ADDVALUE Services
VALUE ADDED COACHING-VAC
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LIFE COACHING
Operation Excellence
Counselling
Team Excellence
Therapy
Adding Value In Totality !!
Business Excellence
Astrology
18
AddValue at a glance
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Business Coaching
Life Coaching
19
Thank You
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