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Navigating India's MSME Landscape for Global Manufacturing Success

There is a global manufacturing migration on the horizon. Adopting the China +1 strategy; more than 90% of North American manufacturers have relocated some production from China in the past five years—and a similar percentage plan to make such moves in the next five years. 


India is the future of global manufacturing


Mexico, Southeast Asia, and India are rapidly emerging as future export manufacturing powerhouses. But India has outpaced the others and even beaten China and Europe, across several parameters, to secure the top position as the future global manufacturing powerhouse. 



India has the lowest manufacturing wage cost, a unique age demographic advantage – a far younger population compared to China, the US, and Europe.  India’s 200 million skilled artisans spread across the sub-continent have an abundant agricultural network of sustainable raw materials. Moreover, in a design-ready, mature domestic market, Indian supply chains are ready for large-scale production, powered by a digital-friendly workforce.  


Micro, Small & Medium Enterprises power the Indian economy 


However, unlike the US and other Western countries, in India, the business of manufacturing is powered by micro, small and medium enterprises (MSMEs). 


If you’re an American retailer, looking to manufacture in India, you will undoubtedly have to be in business with India’s MSMEs. 


Forbes’ MSME Statistics and Trends report (2024) states that a whopping 99% of Indian manufacturers are MSMEs (with an unprecedented dominance of micro-enterprises). With this overwhelming majority MSMEs account for 40% of India’s total production and almost 42% of the country’s exports as well.  


Forming the backbone of the Indian economy, Forbes estimates that MSMEs generate 33% of India’s GDP. MSME’s have created 120 million jobs, with manufacturing being the second largest sector of their employment. 

 

Working with Indian MSMEs is a double-edged sword 



For retailers, working with MSMEs means innovative design, direct-from-source pricing, and margin optimization. 


However, the scale of production greatly varies between large-scale manufacturers and MSMEs in India. Consider Welspun Group; an at-scale Indian manufacturer, who produces $3Bn in revenue from soft home goods with 30,000 employees, compared to Sparkling Hues (a Bzaar partner); an Indian MSME that generates $18M in annual revenue from hard goods, with only 200 employees. 

 

MSME's dominance in India’s manufacturing sector makes the system highly decentralized, while its limited mechanization and unstructured processes also need to be taken into account.


For offshore retailers working with Indian MSMEs, means increased on-ground management for their production. 


India to US MSME supply chain: De-coding multiple points of friction 


Over the past few years, Bzaar has worked with Indian manufacturers of every scale and size, enabling it to decipher the multiple points of friction through the India-to-US supply chain.

Source hassle-free from India, with Bzaar


After understanding these various nodes of friction in the India-US supply chain, Bzaar has developed a range of capabilities to support American retailers – 


  • An in-house design team with sampling skills  

  • Accountability in supply chain transparency  

  • A complete verified database of MSME groups in India 

  • Management of MSME factory production by our in-house team

  • Warehouse and logistics consolidation as a go-to merchant on record 


To learn more on how you can source hassle-free from India, write to Bzaar. We’d love to hear from you. 


Payal Mohta is a freelance content writer, editor, and strategist. She writes about everything business and tech.

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