Tech SMEs in India

Abstract

This rapid review uses a mix of academic and grey literature, with reliance on industry and financial sector reports from the private sector. The review is not comprehensive. Although MSMEs and the entrepreneurial ecosystem in India has received increased attention in recent years, availability of data remains a key issue and reliable data continues to pose a challenge for research in this area (Expert Committee on Micro, Small and Medium Enterprises, 2019, p. 12). Another issue concerns the definition of MSMEs, as MSMEs are defined in different ways and according to different criteria across the world. In India, the definition of MSMEs is based on initial investment in plant and machinery as per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Concerns have been raised that this definition is outdated and does not include enterprises that may be larger than the specified criteria but still face similar issues as MSMEs (Expert Committee on Micro, Small and Medium Enterprises, 2019, p. 18; IFC/Intellecap, 2018, p. 16). Another issue to consider which was not focused on due to the time limits of this rapid review, is that MSMEs can be at very different stages of development (i.e. startups vs established), and this is not always distinguished in the literature. K4D helpdesk reports provide summaries of current research, evidence and lessons learned. This report was commissioned by the UK Department for International Development