According to a survey (released in March this year), by the Confederation of Indian Industry (CII), the MSME sector created the most jobs in the last four years. Buoyed by such findings, the industry chamber believes that promising days are ahead for the country’s MSME sector that plays a pivotal role in its economy. Talking to ET, Shreekant Somany, Chairman, CII National MSME Council , touches upon the major issues facing the sector, besides calling for the need for increased handholding of entrepreneurs. Edited excerpts:In the current era marked by dynamic technology trends, access to updated technology is imperative to sustain in the global value chain. I agree that the level of innovation and value addition embedded into the products are still at their nascent stage and Indian MSMEs need to adapt and inculcate advanced level of value addition to compete at par with their global counterparts. At present, the majority of MSMEs are still struggling with access to upgraded technology and their technical know-how to put them into optimum use, which makes innovating newer products more difficult for them. Studies suggest that in the Indian scenario, smaller enterprises usually focus more on catering to innovation by merely acquiring better and updated machines while larger enterprises focussed more on product standardisation and quality assurance owing to their capacity to garner awareness and investment. The Government of India has designed many schemes in this regard. Schemes such as ‘Promoting Innovations in Individuals, startups and MSMEs ( PRISM ) and Aspire (scheme aimed at rural Industries) are few of such schemes.Non-Tariff measures have been a pain point for the MSMEs who often struggle to catch up with the changing goalposts of NTMs and TBTs set up by the developed countries. MSMEs with their limited resources and knowledge constraints find it difficult to adhere to the stringent sanitary and phytosanitary measures imposed by importing countries. However, with the support of the government, things are moving in a positive direction. The recent developments in the trade dynamics between India and China is a testimony to the changing scenario. India’s adherence to international norms in terms of quality has earned it the opportunity to export non-basmati rice, sugar, fish meals and more. Going forward, I am sure the government will enable the Indian MSMEs to have an edge over foreign counterparts.Lack of access to affordable trade finance is indeed a problem as it often restricts MSMEs' access to global market by restricting the flow of working capital. The LCs, Bank Guarantees are now moving towards trader's finance, receivable’s finance, distributor’s and payable’s finance. In the USA, the trend has taken over and is currently in the ratio of 60:40, i.e. almost 40% of financial transactions take place in the form of Supply Chain Finance while 60% still rely on the traditional way of financing. However, the ratio in Asia is still at a proportion of 80:20. Although the trend in the lending market in India is changing, the pace is yet to catch up to the growing demands of MSMEs. The government needs to take proactive steps in making trade finance more popular among the bankers as well as the MSMEs interested in cross-border trade.I can’t call it a challenge but our engagement and interaction with global SMEs has been difficult. We need to reach out to sector specific MSMEs at an international level. Sector wise matchmaking of Indian SMEs with their global counterparts can attract investment into the country. In recent years, MSMEs in India have garnered much attention from the global leaders and counterpart. Our continuous engagement with SMEs from other countries stands testimony to that. In addition to cross country matchmaking, an easier policy framework for FDIs, digital transformations and improved infrastructure, coupled with skilled workforce will bolster higher global investment for the sector.The Government has always considered the development of MSMEs as its top priority. The landmark reforms aimed towards overhauling the MSME ecosystem and improving the Ease of Doing Business has really helped in boosting the productivity of the sector. However, there are certain issues which still haunt the MSMEs. Delayed payment being one of the sore spots continuously inhibiting MSMEs flow of working capital. Despite the TReDS platform being in place, MSMEs are still struggling for meeting their financial requirements.My request from the Government would be to address the issues of delayed payments, timely availability of affordable credit and access to upgraded technology at cheaper rates so that our MSMEs are able to build their capacities for competing with global counterparts.Logistics costs indeed restrict the Indian MSMEs ambition towards transcending global boundaries. However, government’s constant support in easing the cross-border trade by MSMEs has started yielding results. The efforts in easing cross border trade by improving infrastructure at the Nhava Sheva Port in Mumbai and reduced costs for export and import border compliance have added to the score in World Bank’s Ease of Doing Business rankings. However, more needs to be done in the said area to ease the cost burden of logistics incurred by the MSMEs engaged in exports. Besides, the logistics need to be strengthened and made affordable across all states of the country rather than restricting to only tier-1 cities like Mumbai and Delhi. In this regard, CII’s dedicated Centre of Excellence called CII Institute of Logistics is working towards making a difference.