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Market forces ultimately affect the Global Value Chain and also the supplies: Expert

Updated: Apr 09, 2019 12:09:33pm
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Market forces ultimately affect the Global Value Chain and also the supplies: Expert

New Delhi, Apr 9 (KNN) Expectations of the market influence the value chain leaders and lead to alignment of behaviour of all actors in the chain, said Secretary General of Federation of Indian Micro, Small and Medium Enterprises (FISME) Anil Bhardwaj.

He was addressing a gathering today during Inception Meeting here organized by Responsible Business (C4RB) to discuss outline and receive views to take forward its agenda of the project PROGRESS launched by it to look at Global Value Chains (GVCs) and their implication on specific Sustainable Development Goals (SDGs) in India.

The meet was organized by CRB and Aston Business School to research on how global value chains and factors involved in those global value chains can contribute to SDGs.

Bhardwaj said, “very small segment of Indian MSMEs has been able to link up to GVCs in select sectors such as textile, pharmaceutical, apparel, agro processing and gems and jewellery.”

Based on his recent work on GVCs, he suggested to focus in three areas to help MSMEs link to GVCs.

India should learn to identify the ‘nodes’ in each sectoral GVCs and woo them with what right policies and support eco-system, specialized infrastructure, skills and financial instruments needed by GVCs. Such ‘nodes’ as Foxconn of Taiwan in electronics sector, are instrumental in kinking SMEs to GVCs.

Secondly, for GVCs, what is needed is SMEs of scale and therefore focus in this context should shift to Medium enterprises. It requires helping MSMEs to scale up quickly.

Thirdly, the country needs to learn to value time. One day of delay at borders is equivalent to tariff of 1%.

‘We need to reform our processes at ports, customs, administrative clearances and tax refund matters to ensure every step is time bound and predictable’, he added.

The meeting sought to gather evidence  of connect between GVCs and Sustainable Development Goals (SDGs).

Citing examples of apparel sector, Bhardwaj demonstrated the huge difference between a locally geared garment cluster of Gandhi Nagar (East Delhi) and Tirupur (Tami Nadu) based MSMEs in terms of quality of workforce, working conditions and wages as the latter are linked to GVCs.

The conclusion was that besides better market access, participation of MSMEs in GVCs creates positive externalities for economy as a whole and help the country to attain SDGs also.

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