Quest for 100% FDI: A Boon or Bane for Indian MSMEs

By Faiz Askari, Founder Editor of SMEStreet

While many of us believe that 100% FDI must be implemented in the interest of domestic MSMEs. For my understandings related to SME sector of India, it could be a double-edged sword.

A double-edged sword can be beneficial if used properly. This rule applies to 100% FDI  among MSMEs.

The bottom line remains that the MSMEs in India are not enjoying the best working environment. In fact, everyone has acknowledged that this sector is experiencing multi-faceted challenges. Be it Banking system, market sentiments, new taxation structure and on top of everything the spending power of common Indians have also witnessed turbulence.

The exporters who are mainly coming from the MSME segment are experiencing this issue a major challenge. In addition to MSME exporters, manufacturers, retailers and even any other service sector MSMEs find it tough in today’s pro 100% FDI environment.

Our urge to policymakers is to surely consider FDI, but they must ensure the interest of Indian MSMEs. A policymaker should carefully and closely look at the entire picture with regards to MSMEs. Their financial conditions, their challenges with regards to accessing finance must be considered to get resolved. On the other hand, FDI should act as a great enabler of Indian economy. Not just a mere tool to pump external money into India.

Stay tuned for more articles on SMEStreet on this subject.