The Role of MSMEs in Cross-Functional EX/IM (India)

Abstract

MSMEs (Micro, Small, and Medium–sized Enterprises) have strategically positioned themselves to be pivotal to the dynamism of EX/IM (exports/imports). Capitalizing on their capacity to develop and scale innovative products and services, MSMEs have proven that innovation and EX/IM are complementary strategies, thus driving cross-functionalism into the heart of the supply chain. Amid this surge, we see that MSMEs that are/develop into globally engaged and interdependent firms are underlying catalysts for the exponential growth of internationalized production and distribution systems (Charbonneau, 2013). The challenges of survival, growth, and meeting quality standards remain a pain point for these emerging companies (Reddy, 2020) (Bandopadhyay and Lal Khan, 2020). Nevertheless, MSMEs are en route and some already are, mini-monopolies within their niches and scaling with time to create inevitably bigger monopolies within the market. Over 50% of the current national industrial output is based on MSMEs. They are also responsible for over 50% of Indian exports, as of 2020, an incredible jump from 7.5% in 2018, that too, over an extensive international quarantine period (PIB, 2019). By 2022-23, this participation is expected to jump to 60%. Despite such metastasis, MSMEs still have immense untapped potential in their contributions to the value chain—making it crucial to understand how they are aggressively disrupting the EX/IM industry and in the bigger picture, the logistics branch of the global supply chain (Kakkar and Kumar, 2020).