Ram Mandir effect: MSMEs rejoice with over Rs 1 lakh Cr trade boost

As devotees chant 'Jai Shree Ram', celebrating the inauguration of Ram Mandir in Ayodhya, small businesses are also enthused as the newly-built temple has opened up significant opportunities and promises growth in the foreseeable future.

Leading to the consecration ceremony on January 22, micro, small, and medium enterprises (MSMEs) have played a crucial role across sectors, including infrastructure development, tourism, security and surveillance, merchandise and souvenirs, horticulture, and food, underscoring their paramount importance.

“Over Rs 1 lakh crore trade has happened from January 1 till today—all in the small business sector,” claims Praveen Khandelwal, Founder and General Secretary of Confederation of All India Traders (CAIT), while talking to SMBStory. The figures are double what was initially estimated.

As per a report titled 'India Strategy: Ayodhya – Unlocking India’s Tourism Potential' by brokerage firm Jefferies, a substantial $10 billion transformation of Ayodhya, encompassing a new airport, revamped railway station, township, enhanced road connectivity, and more, is expected to generate a multiplier effect.

Khandelwal suggests the economic activity due to religious tourism will boost development and sprout industries in a 100-km radius of Ayodhya, benefitting a wide range of businesses, including small hotels, provision and confectionary stores, and small food vendors. Furthermore, with the city infrastructure now upgraded, it is poised to strengthen manufacturing and service-oriented MSMEs, potentially creating employment opportunities for over 10 lakh people annually.

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“80% opportunities are yet to open up as the development in Ayodhya and nearby areas is still ongoing,” Khandelwal adds. 

Neeraj Kushwaha, Founder of Bhopal-based Technosys, says that the development of Ayodhya is a "gift to MSMEs”. The company bagged a Rs 40 crore project from the Uttar Pradesh government to install more than 500 AI-based cameras and oversee traffic control through its Integrated Traffic Management System for a period of five years.

“Due to their smaller scale, MSMEs eagerly anticipate opportunities that can enhance their business, expressing confidence that the project will provide sustained support and ensure a steady flow of working capital for their operations, and the inauguration of Ram Mandir is a one-of-a-kind opportunity,” he notes.

Ayodhya-based Pakka Ltd, formerly known as Yash Pakka Limited—a manufacturer of compostable packaging solutions, has also collaborated with Ram Janmabhoomi Teerth Kshetra Trust through its brand CHUK. The objective is to promote environmental sustainability and ensure eco-friendly practices during the Ram Mandir consecration ceremony. 

“The collaboration aims to promote sustainability, reduce waste, and create a positive environmental impact in accordance with the Uttar Pradesh government’s initiative to make Ayodhya a plastic-free zone. Through this collaboration, we will be offering compostable tableware to the temple which aligns with the values of this sacred occasion,” says Jagdeep Hira, India Business Head of Pakka Ltd. 

A publicly listed company, Pakka Ltd’s shares have seen a jump of over 150% in the past two months. From a share price of Rs 92.80 on January 19, 2023, the company stock has soared nearly 4X, closing at Rs 371.00 on January 19 this year. 

“This is a once-in-a-century event and the boost to MSMEs is huge across the country,” says Vinod Kumar, President of India SME Forum. 

Micro businesses play a significant role in crafting all things devotional—from flags and merchandise to replicas. The nationwide sales of these products have been substantial. Zepto Co-founder and CEO Aadit Palicha posted on X (formerly Twitter) that the number of Pooja flower orders on the quick commerce app grew up to 6X on January 22, indicating a wider impact on businesses across the country. 

This trend is expected to persist and extend to other sectors, including prasad makers, decorators, and devotional ones within the same domain.

However, Kumar also cautions about unlicensed businesses entering the business sphere and competing with MSMEs. He advises that the Department for Promotion of Industry and Internal Trade (DPIIT) should form guidelines on what can be made and sold. 

The inauguration and consecration of Ram Mandir and the development of Ayodhya city have inspired MSMEs from across India to be a part of the celebrations. Contributions range from tons of flowers sourced from Uttar Pradesh's Hapur to the creation of a 108-foot incense stick in Vadodara, Gujarat. Additionally, a 400-kg lock from Aligarh and laddu prasad from Hyderabad underscores the enthusiasm among MSMEs.

Khandelwal of CAIT says that Ayodhya has received investments worth Rs 4-5 lakh crore, which will directly or indirectly benefit small businesses, whether in manufacturing, service or supply chain segments. The city and its businesses expect more such opportunities to arise in the future.

"Now is the time of entrepreneurs,” asserts Khandelwal, adding that MSMEs and startups should focus their discussions on exploring innovative opportunities to contribute to the development of Ram Mandir, Ayodhya, and the surrounding cities.