MSMEs in electronic components and equipment sector need to become more competitive

CRISIL has analysed over 300 rated MSMEs engaged in the manufacture of electronic components and equipment based on 2013-14 financials (financial year April 1-March 31), to understand the growth performance and global reach of these MSMEs.

The analysis revealed that the average annual turnover of the 300 MSMEs grew from Rs 11.43 crore in 2011-12 to Rs 12.91 crore in 2012-13 (a growth of 13 per cent) and to Rs 14.11 crore in 2013-14 (a growth of nine per cent). The key products contributing to their growth include consumer and industrial electronic components and equipment. The demand for these components is set to rise in future in view of the Digital India initiative launched by the central government.

The analysis further reveals that currently, of the total number of MSMEs in this space, only six per cent export their products. This indicates a lack of competitiveness in matching global standards, which can be addressed by investing in technology.

Recent central government initiatives such as the setting up of Special Economic Zones, encouraging a favourable climate for foreign direct investment, and research and development will help these MSMEs become more competitive.

Note: This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy. CRISIL has rated over 75,000 MSMEs in India. The analysis is based on the latest audited financial statements (i.e. 2013-14) of CRISIL-rated MSMEs. Most enterprises finalise their audited financials for the previous financial year by the end of the second quarter of the current one.