Operationalisation of an auto cluster project: Indian experience

Abstract

Small and Medium Enterprises (SMEs) contribute nearly 6% of GDP, more than 35% of national exports and employment for more than 30 million people of India. The SMEs make more than 8,000 different products accounting for 40% of industrial production. However, SMEs are vulnerable to many risks and need support from OEMs, government and other agencies. It has been found that SMEs performed very well in countries such as Italy, Brazil, Europe and many other countries in the world through industrial cluster approach. In the recent past, Indian government is supporting the industries through cluster projects with an objective to enhance the competitiveness of Indian SMEs in particular. In this paper, we present the approach followed in operationalisation of an auto cluster project located in central India. The experience shows that the competition and cooperation are two key elements that drive the successful implementation of cluster projects. We also highlight some of the important issues that SMEs face and suggest suitable cluster interventions required by industry partners, government and educational and research institutes.