Leading SMEs of India 2023

Leading SMEs of India 2023 | 61 [ INDIAN SME SECTOR OVERVIEW ] Thr us t on i n f r as t r uc t u r e development: The enhanced thrust by the government on infrastructure development has provided substantial boost to the engineering industry. The construction of roads, highways, rai lways, metro projects as well as expenditure on core industries have led to the surge in demand for capital goods. Increasingfocuson Industry4.0: The fourth industrial revolution or Industry 4.0 has helped engineering companies in minimizing wasteful processes and optimizing use of energy and other inputs , in turn improving the overall efficiency. India is gradual ly moving towards becoming a global engineering hub by adopting disruptive technologies like 3D printing, machine learning, data analytics and Internet of Things. CHALLENGES L a c k o f i n f r a s t r u c t u r e : Engineering MSMEs located especially in Tier II and Tier III cities have infrastructure challenges of utilities and other physical infrastructure. The lack of these basic infrastructure facilities hampers the growth of engineering MSMEs. Procurement of raw material at competitive prices: In the engineering sector, access to raw material at competitive pr i ces can make a huge di f ference in operat ional eff iciency and margins for MSMEs . However , MSMEs due to their limited scale of operations, find it difficult to get rawmaterials at competitive prices. Lack of access to global markets: MSMEs mainly cater to the large companies and hardly have access to global markets. This limits their ability to scale up and to stay afloat in the scenario of subdued domestic demand. GROWTH OUTLOOK With the reopeningof thedomestic and global economies, Indian engineering sector has set on the path of steady recovery. The revival in thedemand for capital goodswill be further supported by continued thrust of the government on development of key infrastructure, rise in private capex plans backed by improvement in the capacity ut i l izat ion and easing of raw material costs. Nonetheless, the growing fears of recession in advance economies along with ongoing geo-political tensions pose significant downside risks to the export demand for Indian engineering products. Going forward, the industrywill also witness a transition towards green production methods, leading to the growth of a new field of engineering known as ‘sustainable eng i nee r i ng . Be s i de s , t he increased number of engineering companies will embrace Industry 4.0, which will benefit them in terms of product differentiation, value-added services, dynamic price setting and closer customer relationships. The adoption of innovative technologies along with the existing strong production base can help create a strategic competitive advantage for Indian engineering companies in both domes t i c and i nterna t i ona l markets. Dun & Bradstreet