According to the Confederation of Indian Industry (CII), the MSME sector is the backbone of India’s national economic structure, constantly strengthening the Indian economy in the face of global economic meltdowns and adversities. Comprised of more than 51.1 million units throughout the country, the MSME sector contributes up to 7 percent of the manufacturing GDP. It also contributes 31 percent of the GDP from service activities, and 37 percent of India’s manufacturing output to the Indian economy. Apart from that, the MSME sector also facilitates job creation. The sector has provided employment opportunities to more than 120 million people, and counting. In terms of trade, Indian SMEs contribute almost 46 percent to overall exports from the country, and has maintained a consistent growth rate of 10 percent.
The rise of the SME sector also managed to accelerate development in Tier 1 and 2 cities, and played a key role in improving the individual economic scenario in each region. In fact, the success of small businesses in these areas eventually inspired many ambitious individuals to capitalize on the host of prospects available in other markets as well, mainly in Tier 3 and 4 cities.
Tier 3 and 4 cities, the emerging SME hubs of India
While the growth and prevalence of SMEs have been generally recorded in Tier 1 and 2 cities, it seems that the trend is now slowly shifting towards Tier 3 and 4 cities as well. Inspired by increasing opportunities for such businesses, many have now begun to invest in small businesses within Tier-3 and 4 cities, and in the process allow such regions to develop at an unprecedented rate.
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