India Needs MSMEs to Boost Competitiveness: NITI VC

New Delhi, Mar 6 (PTI) India needs to attract MSMEs from other countries to drive competitiveness and integrate small and medium enterprises with larger supply chains to achieve 7-8 per cent economic growth, NITI Aayog Vice-Chairman Suman Bery said on Thursday.

Addressing an event organised by industry body CII, Bery said that India will have to attract micro, small and medium enterprises (MSMEs) from other countries to be fully competitive.

"We have miles to go to keep up with China. Because China was successful in attracting the big boys," he said.

"Big boys can negotiate complicated rules...we will not be fully competitive unless we can attract MSMEs from other countries," he said while highlighting that over-regulations have become barriers to entry into Indian markets, particularly for MSMEs.

The NITI Aayog VC also said that attracting foreign MSMEs also depends on a vibrant relationship between domestic MSMEs and the large-scale corporates to which they contribute.

Pointing out the integration of the automotive sector in Thailand and Japan with the global value chain over the last 20 years, Bery said, "There is a terrific home bias in the activities of our large scale manufacturers, and we have got to chip away".

He said MSMEs need to be integrated into larger supply chains to drive real competitiveness and achieve 7-8 per cent economic growth.

Bery noted that growth happens through innovations and gains from trade, but sustaining momentum is harder when you are doing well.

"The challenge is to keep pushing forward -- India's corporate sector must step up, and MSMEs need to be integrated into larger supply chains to drive real competitiveness and achieve 7-8 per cent growth," he said.

Speaking on India's growth prospects, Bery said that the country has staged a remarkable economic recovery post-COVID, emerging as the fastest-growing large economy in the world, as acknowledged by the IMF.

"With moderate inflation and declining poverty levels, the country is on a strong growth trajectory. The challenge now is to sustain and accelerate this momentum," he said.

Bery noted that historically, India has functioned as a collection of regional economies rather than a single integrated market.

"But with GST and major infrastructure investments, we are now transitioning into a truly unified national economy. This integration will be one of the most powerful drivers of India's future growth," he said.

Highlighting the importance of sustainability, Bery said that as the world moves towards greener supply chains, Indian enterprises -- both large and small -- must adapt.

"Sustainability is no longer just about compliance; it is becoming a core factor in global competitiveness," he said, adding that MSMEs must be supported in this transition, ensuring they are part of a greener, more resilient industrial ecosystem.

Bery emphasised that domestic reforms could get a substantial part of the economic growth needed to become a developed economy by 2047.

“But as in time, the third largest economy, and we are seeing this now in our interactions with the US administration, more will be asked to call us, and we should be ready for that,” he added.

Stressing on the role of the private sector, he said, “we are not going to get to 7-8 per cent growth without the corporate sector being a full partner”.

Bery noted that a large country like India must have a vibrant manufacturing sector, in part for national security reasons, because 'we should not be as dependent as we have on external suppliers'.

"India's enterprises, both corporate and otherwise, have an aversion to adding labour, maybe because of labour laws, labour indiscipline or labour skills,” he said, adding India is doing splendidly in exporting services, but we are much less successful in the export of labour or labour-intensive manufacturing.