Policies and Partnerships for MSME Growth To truly empower MSMEs, stakeholders must move beyond rhetoric to action. Policymakers should focus on crafting regulations that ensure fair competition and prevent monopolistic behaviors.
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Micro, Small and Medium Enterprises (MSMEs) are often hailed as the backbone of the Indian economy, contributing significantly to GDP and employment; yet, in the rapidly evolving digital landscape, MSMEs face significant challenges. There are only a handful of tech giants in the ecosystem, while new smaller players are emerging everyday, often struggling to access resources, compete fairly, or innovate. Addressing these disparities requires a collective effort involving policymakers, industry leaders, and the tech giants themselves.
"Policymakers must enforce anti-monopoly regulations, mandate platform neutrality, and introduce subsidies to help SMEs adopt advanced technologies," asserts Ajay Thakur, managing director and CEO of TGI SME Capital Advisors and ex-head of BSE SME & Start-up. His statement underscores the urgency of creating a fair and competitive digital economy.
The challenge
As Arun Singh, global chief economist at Dun & Bradstreet, observes, "Policymakers must act to prevent oligopolistic behaviors to create a fair and competitive digital economy." Today's digital landscape is characterized by market concentration, where smaller platforms find it difficult to control pricing, algorithms, and access. This can stifle competition as well as reduce innovation and make it harder for MSMEs to thrive.
A critical step to break this concentration, Singh suggests, is modernizing regulations around data transparency and platform practices. "In some cases, incentivizing new entrants into the market through grants, tax breaks, or funding can be more effective than regulatory crackdowns," he adds. The aim is to foster healthy competition while encouraging fair play across the board.
The road to empowerment
India's policymakers are already taking strides to level the playing field. Initiatives like the Open Network for Digital Commerce (ONDC), interventions by the Competition Commission of India (CCI), and skill development programs such as the Pradhan Mantri Kaushal Vikas Yojna (PMKVY) and Startup India serve as vital pillars in this mission.
Dinesh Gulati, COO of IndiaMART InterMESH Limited, emphasizes the need to prioritize regulations that promote fair competition. "Policymakers must ensure that SMEs have access to relevant digital skills and platforms like ONDC that democratize commerce," he says. These programs, coupled with the government's efforts to promote digital literacy, empower SMEs to compete and grow in the digital age.
Collaboration as a catalyst
Karthikeyan VS, director & head of Asia Business at Expleo, highlights the importance of collaboration among tech giants, policymakers, and industry leaders to create a competitive digital environment. "Tech giants need to adopt fair pricing models for their services and offer transparent terms, ensuring that SMEs can afford and benefit from essential tools," he says.
Karthikeyan advocates for measures such as grants, tax incentives, and subsidies to encourage MSMEs to innovate in cutting-edge fields like blockchain and artificial intelligence. This collaborative effort will ensure that MSMEs have the resources and training necessary to compete in a tech-driven economy.
Tech giant's platforms, algorithms, and pricing structures can either empower or disadvantage smaller players. Milan Shah, managing director of aerpace Industries Ltd., offers another perspective, stating, "Every giant starts small. Today's tech giants were once innovative startups that grew because they had the freedom to compete on a level playing field."
Shah argues for the importance of net neutrality and inclusivity. By offering affordable tools, transparent policies, and equitable access, tech giants can nurture innovation and create opportunities for MSMEs to thrive. "A healthy ecosystem isn't about dominance; it's about collaboration," he says.
Building a thriving ecosystem
A thriving digital ecosystem is one where innovation flourishes, competition is fair, and all players—big and small—have the opportunity to succeed. As Ajay Thakur notes, "A thriving digital economy depends on the inclusion and empowerment of SMEs. By creating a level playing field and supporting their growth, we can ensure sustained innovation, job creation, and economic resilience."
This vision is shared by industry leaders who advocate for open-data initiatives, incubation programs, and mentorship opportunities for MSMEs. Tech giants, in particular, are encouraged to adopt ethical acquisition practices that foster, rather than stifle, innovation.
Beyond fair competition, enabling MSMEs to leverage digital tools effectively is critical. Digital literacy programs, like those promoted under PMKVY, equip entrepreneurs with the skills they need to navigate the digital economy. Access to affordable infrastructure and technology training ensures that small businesses are not left behind in the race for innovation.
Karthikeyan underscores the importance of these efforts, stating, "SMEs should be entitled to digital literacy training and resources to better compete and innovate. By encouraging transparency, collaboration, and equitable access to digital infrastructure, these efforts will foster a healthier and more active digital ecosystem."
The way forward
To truly empower MSMEs, stakeholders must move beyond rhetoric to action. Policymakers should focus on crafting regulations that ensure fair competition and prevent monopolistic behaviors. Programs like ONDC and Startup India should be expanded to reach more MSMEs, particularly in rural and underserved areas.
Meanwhile, tech giants must recognize their role in building an equitable ecosystem. Transparent pricing, SME-friendly tools, and mentorship programs are not just ethical imperatives but strategic investments in a sustainable future. By fostering trust, collaboration, and inclusivity, India can create a digital economy where MSMEs are not just participants but key drivers of innovation and growth.
