MSMEs step into the global trade spotlight as India rewires supply chains

As global trade dynamics evolve rapidly, India’s micro, small, and medium enterprises (MSMEs) are emerging as vital players in the country’s economic and export resurgence.

Accounting for nearly 46% of India’s exports as of May 2024, MSMEs are leveraging shifts in geopolitics and supply chain strategies to deepen their footprint in new and diverse markets. The global imperative to reduce dependency on single-country supply chains has created a fertile ground for Indian MSMEs to scale and diversify their export ambitions.

The rising economic footprint of MSMEs

India’s MSMEs are evolving beyond outdated perceptions of being unstructured and fragmented. With 4.77 crore enterprises registered on the Udyam portal as of July 2024—and an extraordinary 2.49 crore added in the last fiscal year alone—this sector is formalising at an exceptional pace.

Employing over 20 crore individuals, MSMEs are among India’s largest employment generators and an indispensable contributor to economic growth. Their share in GDP, at 30.1% for 2022-23, highlights their expanding influence not only in domestic markets but increasingly on the global trade stage.

Turning logistics into a strategic asset

Long viewed as a bottleneck, India’s logistics landscape is being rewired into a competitive advantage for MSMEs. The PM Gati Shakti National Master Plan and the National Logistics Policy are breaking down bureaucratic silos and integrating multiple ministries to create a seamless multimodal logistics ecosystem. This strategic push is to lower costs and improving the reliability of exports.

The payoff is tangible. Efforts to cut air cargo dwell time to under 24 hours signal a strong intent to meet global benchmarks. Meanwhile, Indian ports now boast an average turnaround time of just 0.9 days—faster than established trade giants like the United States and Germany. The rollout of 35 Multi-Modal Logistics Parks in cities like Jogighopa, Nagpur and Indore, is extending these gains to Tier II and III hubs linking MSMEs more directly to high-efficiency export corridors.

Pharma, electronics, and textiles lead the charge

Across key sectors, MSMEs are no longer peripheral suppliers but are becoming export drivers in their own right. In pharmaceuticals, small manufacturers are expanding rapidly into Southeast Asia and Africa, supported by the Production Linked Incentive (PLI) scheme that is establishing India as a preferred global sourcing hub.

Ensuring product integrity during international transit remains critical, especially for temperature-sensitive shipments. To maintain cold chain integrity and comply with stringent global standards, organisations are adopting near real time monitoring solutions. These technologies provide continuous visibility and control, helping to safeguard product integrity throughout their journey.

In electronics, MSMEs in Tamil Nadu and Uttar Pradesh are fuelling India’s deepening integration into global value chains, especially in mobile manufacturing. For these businesses, managing the inbound flow of components efficiently is essential. Digital solutions help streamline this process by improving visibility, speed and compliance.

Meanwhile, textile clusters in Gujarat and Tamil Nadu are aligning closely with global ESG standards, addressing the evolving compliance demands of international buyers. The PM MITRA initiative, with seven integrated textile parks underway, is enhancing productivity and traceability, positioning Indian textiles as globally competitive and sustainable.

Looking Ahead: Enabling the next phase of growth

These trends point to a clear shift—Indian MSMEs are not merely peripheral players; they are emerging as agile, globally competitive businesses. Their growing influence is shaped by a confluence of resilient entrepreneurship, progressive policy, and strategic infrastructure investments.

To sustain this momentum, India must strengthen the wider MSME ecosystem through better market access, streamlined compliance, and smarter supply chains. This requires stronger public-private collaboration. While government initiatives lay the groundwork, global logistics providers are stepping up with tailored logistics solutions that improve connectivity, agility, and cross-border trade for small businesses. Such support helps MSMEs navigate complexity, boost export readiness, and compete more confidently in global markets.

As we move ahead, it’s important to see these businesses not just as contributors to GDP or job creation, but as central to India’s growing influence in global trade and pivotal to shaping the country’s economic future.

(Nitin Navneet Tatiwala is the Vice President, Marketing, Customer Experience, and Air Network at MEISA, Fedex)