Unlocking MSME growth potential in Northeast

The Micro Small and Medium Enterprises (MSME) are the largest employers and account for the majority of businesses. With fragile ecology posing challenges for the growth of large industries in the Northeast region due to the apprehension of unwarranted ecological destruction, MSMEs play a crucial role in the local economies of the region. The region has huge potential for MSMEs’ growth in agriculture, food processing, tourism, infrastructure, and the IT sector. Unlocking this potential requires innovative business ideas. Connectivity, both physical and digital, has received a big push by the central and state governments in the region. This has created new opportunities for existing entrepreneurs to expand their businesses and for new entrepreneurs to go for an initial investment. Digital payment ecosystems and online and phone banking have also facilitated ease of doing business in the region and lessened worries about payment against product deliveries. Agriculture and horticulture in the region, being organic by default, have high demands among health-conscious global citizens. Production and productivity play a crucial role in MSME business in making products sustain competitive markets for the long term. Brand building is crucial for getting a strong foothold in the business world and boosting confidence among buyers, but much more needs to be done in respect of the branding of MSME products in the region. Packaging is another area that has yet to be prioritised by a large section of MSMEs in the region, and these units continue to produce unimpressively simple packaging. Packaging with correct labelling on product information boosts the confidence of consumers and creates advertising space. Many MSME products from the region, particularly in the food processing sector, fail to gain adequate market response despite being authentic and of high quality. Attractive packaging requires innovative design ideas so that it can give the finished product a unique look that can be distinguished among hundreds of other MSME products on the market. Even in the handloom  and handicraft sectors in the region, packaging is not a priority for many MSME units, and they prefer to sell products in raw packaging. A few entrepreneurs who have made additional investment in packaging have been able to expand the market for their products to other regions or export to important global markets, but their percentage is still quite low. Weaving is a traditional cultural practice among indigenous communities in the region. Product diversification with the adoption of traditional motifs and designs on textile products suitable for consumers outside the region has helped MSMEs in the sector unlock new market opportunities, but success stories are limited to a small section. The capacitycity building of entrepreneurs by providing updated market information must follow the capacity building of weavers to apply their expertise in making the products that have high market demands. This also holds true for the handicraftraft sector. For tourists visiting the region, often large sizes of traditional craft items are not convenient to pack and carry back home. Miniature versions of the same products are more preferred by tourists and other visitors. The MSMEs, getting this market sentiment correct is crucial to tapping the potential. Customisation of products allows for premium pricing, but MSMEs are often apprehensive of taking a risk as they are wary of losing the available market where affordability is the determinant. The development of a product catalogue for more than 200 products from the region with export potential is an encouraging development, but the challenges are to groom enterprises as exporters to unlock the potential optimally. The euphoria over the first consignment dies down fast if they fail to fetch the order for the subsequent consignments due to issues of quality control, packaging, and labelling. Exposure visits of MSME owners from the region to advanced states where similar enterprises have scripted many success stories to unlock potential in the national market as well as export markets need to follow training sessions on capacity building. MSMEs growing as suppliers of products and services to large industries ensure long-term sustainability, but such products and services being cost-effective and not failing in timely delivery is critical for the continuation of the business deal. Jute and bamboo availability in the region can be utilised to manufacture eco-friendly packaging materials, but enterprises collaborating with the packaging industry and design institutes to identify the actual market demands is essential for commercial viability. The establishment of packaging material product units for products such as folding cartons and food-grade containers in Guwahati has helped MSMEs experiment with packaging, but more such units being set up in other parts of the region will go a long way in facilitating brand building to enhance the uniqueness of products from the region. The industrial scheme for the northeast region, the Uttar Pradesh Transformative Industrialization Scheme, 2024, and the central government scheme for the promotion of MSMEs in the northeast region can be leveraged to fully unlock the potential in the sector. States in the region playing a pro-active role can make it happen.