Opportunities galore for MSMEs in ASEAN, African markets

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Bikky Khosla | 28 Jul, 2009
It has been a trying time for all with demand from traditional trade markets showing a downward trend. And for micro, small and medium enterprises (MSMEs) it has been a painful time as they watched their products lying in their warehouses for lack of customers. The decline in demand has also affected production and there have been job cuts in various sectors like textiles, handicrafts, etc. We are not expected to get major contracts in the midst of this downturn from the US, UK, and European markets as was the case earlier.

The current crisis brings out global interconnectedness. Since we live in a big global village our economy is also exposed to the global market, and will therefore, not escape some slowdown.

India is however, better positioned to withstand the worst. I'm confident that a 7 percent growth is not beyond us this year and that it shall not be long before we fully regain our growth momentum. However the role of the MSME sector in very important to bring the country's economy back on track. The undeniable contribution of the sector over the years calls for a change of strategy amidst the current economic scenario.

The current downslide which has affected most MSMEs since last year, calls for a paradigm shift in their strategy and in exploring new markets. They need to look beyond the US, UK and European markets and focus on the Asian and African markets to strengthen their position and hedge themselves against risks.

Today, MSMEs should look at tapping the ASEAN and African markets. These markets are very large and are growing and have a better fit in terms of cultural understanding.

With the Free Trade Agreement (FTA) in goods expected to be signed between India and the 10-member ASEAN during the India-ASEAN summit, I have reasons to believe that this FTA will open several doors for Indian MSMEs to explore the markets in these nations.

Apart from the ASEAN markets, the African continent too has a lot to offer to MSMEs in terms of trade opportunities. After Asia, Africa is the second- fastest growing region. Since cost-effective and effective Indian technologies give us a unique advantage, Indian companies should accelerate their investments and technical tie-ups with African partners.

Africa today is an emerging market. Several nations in the continent still remain untapped - a big opportunity for Indian MSMEs. However apart from merchandise exports, the MSME sector has to look at playing a facilitator's role for larger companies in sectors including, but not limited to agriculture, mining, ICT, oil pipelines, automotive plants, chemical industry, power generation and transmission, etc. MSMEs fit well into the supply chain of larger companies and can easily fulfill their demands in Africa for new technologies, engineering services and manufacturing capabilities for local value addition.