SARDI India MSME Tech
Policy Fellowship Program
Background
There are over 63 million MSMEs in India, 99% of which are microenterprises. Over 80% of those microenterprises do not employ workers, and nearly 70% of enterprises are not registered with any statutory office, thus being invisible from the public domain. In contrast, the tremendous spate of digitalisation over the last decade offers tremendous growth opportunities for this segment. A full-stack digital adoption by MSMEs in India can unlock higher growth for enterprises and pave the way for more inclusive economic development.
About South Asia Regional Digital Initiative (SARDI)
Through its South Asia Regional Digital Initiative (SARDI) program in India, USAID propels digital connectivity and economic development in South Asia by strengthening the digital capacity of micro, small, and medium enterprises (MSMEs), raising awareness around critical cybersecurity issues, and fostering opportunities for MSMEs and governments to engage on digital and ICT policy issues. SARDI, implemented by DAI’s Digital Frontiers, under the Digital Connectivity and Cybersecurity Partnership (DCCP), promotes cybersecurity, digital upskilling, and digital policies that advance more open, inclusive, and free digital economies in South Asia.
Recognizing this potential, USAID and DAI have initiated a fellowship program in India to conduct policy research at the intersection of digitalization and MSMEs to catalyze sustainable changes in the policy ecosystem. Anchored by LEAD, the fellowship program seeks to provide actionable policy recommendations to enhance digital adoption among MSMEs.
The three fellowships focus on distinct underserved segments of the MSME ecosystem and together will provide a comprehensive overview of digitalisation opportunities and challenges across the following sectors.
Project Team
Santanu Pramanik, Research Director; Preethi Rao, Partnerships & Outreach Director; Vatsima Tripathi, Senior Research Associate, LEAD at Krea UniversityFellowship Cohort
Opportunities and Challenges for Digitalization among Collective Enterprises in India’s Handloom Sector
Think Tank
Mentor
Priya Krishnamoorthy
Founder and CEO,
200 Million Artisans
Fellow
Eisha Choudhary
SARDI India MSME Tech Policy Fellow
India’s vibrant handmade economy, often referred to as the second largest employer in the country, can act as India’s answer to becoming a $5 trillion economy. With a changing consumer who is conscious about buying from local businesses, collaborative supply chains and the digital boom in the country, the handloom sector has a huge untapped potential. Approximately 75% of the overall production in India’s textile industry, which continues to be the world’s second-largest manufacturer and exporter, is contributed by MSMEs that operate handloom, handicrafts, and small-scale power-loom units. Against this backdrop, it was observed that weaver cooperatives and other collective enterprises could play a major role in transforming the sector and driving the growth that India desired. However, these enterprises remained largely neglected. This project aimed to highlight the opportunities and challenges in digitalisation experienced by collective enterprises in India’s handloom sector, bringing forth the voices of people at the margins who were part of these collectives and keeping their needs at the center, with a gender and policy lens. This research also attempted to develop recommendations for policymakers and civil society organisations and advocate for a better digital landscape for the growth and development of cooperatives and producer companies in India’s handloom sector.
Examining the Potential of Digitalized Platforms in the Formalization of Nano Businesses in Trade and Retail Transformation
Think Tank
Mentor
Dr. Lalitagauri Kulkarni
Assistant Professor, Gokhale Institute of Politics and Economics
Fellow
Vibhanshu Kumar
SARDI India MSME Tech Policy Fellow
Despite significant efforts to encourage enterprise formalization in India, the informal sector remains a significant portion of the economy. Recognizing the potential benefits of formalization, such as increased access to credit, expanded growth opportunities, job creation, and improved financial stability, is crucial amidst the challenges faced in this process. The study aimed to identify both demand and supply-side challenges in promoting formalization, as well as opportunities for digitalization in nano enterprises within the service sector.
Way Forward for Promoting Digital Uptake by Agri-MSMEs (FPOs) in India
Think Tank
Mentor
Sridhar Easwaran
Head, Samunnati Foundation
Mentor
Poorna Pushkala
Group Head - Corporate Strategy and Process Excellence, Samunnati
Fellow
Shubhangi Jaiswal
SARDI India MSME Tech Policy Fellow
In India, Farmer Producer Organisations (FPOs) have grown tremendously, after the 10,000 FPO project gathered momentum in the last 18+ months. Compared to cooperatives, FPOs are structured differently in terms of their membership, governance, and business model, with the key purpose of facilitating smallholder commercialization and increasing farm incomes. Despite an enabling policy and legal environment and the continuous growth in the number of FPOs, digital adoption continues to be a challenge and the penetration of technology offerings is below the desired levels. This study focused on the present digital offerings to FPOs and provide recommendations for industry players, policymakers and other key FPO ecosystem stakeholders to drive digital adoption and ensure technology penetration.
Events
Unlocking Digital Horizons for MSMEs in India
As the SARDI MSME tech policy fellowship draws to a close, a knowledge-sharing workshop was organised to showcase key insights and opportunities for facilitating digital adoption by MSMEs, across a diverse range of sectors.Â
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The event featured senior policymakers and experts including Dr. Carrie Antal (Deputy Director, Indo-Pacific Office, USAID India), Roshan Nair (Specialist – Digital Inclusion, USAID), Sharon Buteau (Executive Director, LEAD at Krea University), Suvendu Rout (Vice President, Access Development Services), Jiji Mammen (Executive Director, Sa-dhan), Deepanshu Khandelwal (CEO, Catalyst Atal Incubation Centre at IFMR) and Pradnya Godbole (CEO, deAsra Foundation and Director, Centre for Excellence in Entrepreneurship Development).
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The workshop presented key insights gathered during the fellowship program, emphasising the challenges and opportunities in digital adoption for microenterprises.Â
SARDI India MSME Tech Policy Fellowship Program – Inception Workshop
To formally launch the fellowship, a discussion featuring experts from government, industry, and academia was organised. The workshop presented evidence of implementation gaps in current policies to enhance digital uptake among MSMEs and highlighted potential policy adjustments needed to facilitate digital adoption. Participants brainstormed new policy ideas to incentivise the digital transformation of MSMEs. These learnings helped fellows and think tanks improve the research design and sharpen recommendations that will inform policymaking.
