Indian SMEs contribute 30% to the nation’s GDP and 48% to exports while employing 110 million individuals. However, as markets globalize, the competitive landscape intensifies. SMEs are no longer confined to domestic operations but are increasingly collaborating with global enterprises. These partnerships are characterized by advanced supply chain integrations, technology transfers, joint ventures, and co-manufacturing arrangements, which allow Indian SMEs to tap into cutting-edge innovation, expand their market presence, and drive scalable growth.
The opening of India’s economy in the 90s paved the way for never-before-seen industrial prosperity; businesses of all sizes saw tremendous growth in all aspects of their business while creating a healthy competitive environment with global players. The joint venture with international companies resulted in many iconic partnerships, such as those with Hero Honda, Swaraj Mazda, and many more. Businesses that rose to the top during these times underwent many drastic changes that changed the face of Indian SMEs. In the subsequent information, Successful companies have pointed out the significant factors that led to their monumental rise.
Partnerships with global enterprises are critical for enabling local firms to become embedded in the international value chains. In the case of Indian SMEs, these partnerships weren’t simply about supply transactions, but they involved deeper and integrated relationships. The end goal here was to align closely with the value creation processes of multinational corporations (MNCs), thus providing higher value addition rather than simple offering of low-cost products or products.
"Success in the APAC supply chain demands collaboration, innovation, and a steadfast commitment to sustainability," Matthew Monaghan, Head of DSJ Global, APAC.
Bharat Forge’s strategic partnership with Airbus is a prime example of this integration into global value chains. Bharat Forge, originally an SME in India’s forging industry, evolved into a key supplier of complex and high-precision forged components for Airbus. However, the success of this partnership stems not only from their capabilities but from their commitment to aligning its production processes with their partner’s global supply chain standards.
By adhering to stringent quality controls, certifications, and operational timelines demanded by Airbus, Bharat Forge had elevated itself to the higher echelons of global aerospace manufacturing. This relationship allowed them to unlock access to advanced aerospace technology and production practices, eventually allowing it to explore other segments, such as electric mobility and defense. In essence, the collaboration exemplifies how Indian SMEs can leapfrog in sophistication by aligning with the processes of global MNCs.
Competing on a global scale requires access to capital-intensive or complex technologies that are indigenously difficult for independent development. These aspects were crucial for Indian SMEs and are still critical mechanisms that elevate their competitiveness. Acquisition of advanced technologies can be facilitated through these collaborations, thus allowing a streamlined channel of innovation while simultaneously adhering to international regulations, ultimately fostering a sophisticated local manufacturing ecosystem.
"Knowing what to invest in and ensuring that new methodologies are launched accurately and quickly comes down to three things – what you have, what you know, and who you know," Zoya Brar, Founder, CORE Diagnostics.
Ramco Systems exemplifies how technology transfers can be a game-changer for Indian SMEs. Specializing in enterprise resource planning (ERP), they collaborated with a global HCM technology leader to incorporate advanced artificial intelligence and machine learning capabilities into its ERP systems. The collaboration allowed the company to innovate its product offerings by leveraging AI-driven features such as predictive analytics, advanced workforce management tools, and machine learning-based automation.
This technology transfer not only enhanced Ramco’s technical capabilities but also increased its credibility and market reach, allowing it to compete effectively against global ERP providers such as SAP and Oracle. Furthermore, the partnership positioned them as a global player in the HR technology market, particularly in the Asia-Pacific region. This demonstrates the critical role technology transfers play in enabling Indian SMEs to keep pace with global innovation trends while meeting the complex requirements of international markets.
The primary advantage of collaborating with global enterprises is their access to an established international consumer base. Inherently, not just Indian SMEs but also foreign companies struggle to keep up with the red tape of their new market base. Partnerships like these allow them to navigate complex regulatory environments, nuanced cultural preferences, setting up distribution networks and other unforeseen challenges unique to that environment.
"Facilitating cross-border collaborations, local expertise plays a crucial role in comprehending the market nuances and assisting in developing tailored strategies," Amandeep Kochar, President & Group CEO, Baker & Taylor.
Hero Cycles' partnership with Germany's Mitteldeutsche Fahrradwerke (MIFA) is a case in point. This collaboration provided Hero Cycles with immediate access to European markets by leveraging MIFA’s established distribution channels and market presence in Germany and neighboring countries. By joining forces with MIFA, they were able to penetrate one of the most competitive bicycle markets globally without having to navigate the complexities of market entry independently.
In addition, the collaboration helped Hero Cycles to diversify its product range to meet European preferences while maintaining cost competitiveness through production facilities in India. The partnership highlights the critical role global enterprises play in helping Indian SMEs expand into new markets, thereby accelerating growth and market diversification.
The evolution of Indian SMEs through global collaborations is more than a trend; it represents a profound shift in how these enterprises navigate an increasingly interconnected world. As they integrate into global value chains, access cutting-edge technologies, and leverage established international networks, they are redefining their role on the global stage. This transformation challenges the traditional boundaries of enterprise growth and showcases a model where strategic partnerships are not merely advantageous but essential. Their future hinges on their ability to embrace these global synergies, turning potential challenges into opportunities for innovation and market expansion.
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