An Empirical Study of SMEs in Electronics Industry in India: Retrospect & Prospects in Post WTO Era

Abstract

Small and Medium Enterprises have been globally recognized as vital components of a domestic economy and major contributors to employment generation in a country, regardless of global barriers. SMEs form the lifeblood of any vibrant economy. In an emerging economy like India, SMEs have a significant socio-economic role to ensure overall development of the nation.Electronic Sector is an upcoming sector in India. The Indian Electronic Industry is undergoing transformation due to the new economic policy and business environment in the post WTO regime. With the delicensing of the entire consumer electronics industry and the removal of the restrictions on foreign investments, almost all the important global players like Thomson, Sony, National, LG and Samsung have entered in the Indian Industry. It has still a huge scope for either direct entry or through collaborations with the local companies.This paper examines the problems, strategies for investments, competences development, technological up gradation, quality improvement, Govt. Policies, Equity participation by MNCs and overall improvement of this sector in the post WTO regime. The study has been done by using data acquired from an extensive survey of Indian SMEs in the Textile Sector and from the experienced Bankers/ Officials/Policy makers of Govt. of India.The key findings of the study are that lack of quality consciousness, growth conducive environment, inadequate governemnt support and difficulties in raising funds from market. Further, the study highlights the need to upgrade technology in the Indian Electronic SME Sector and also develop a strong and supportive Financial System .