Government to initiate Integration of MSME supply chain on Ecommerce platforms: could help ailing MSME
May 5, 2020

Government to initiate Integration of MSME supply chain on Ecommerce platforms: could help ailing MSME

All India Association of Industries(AIAI) is a premier Chamber of Commerce , an apex body  representing the trade, industry and employment since 1956 . AIAI is a think tank established to suggest government about remedial measures in the changing economic scenario. 

AIAI calls for deployment of funds allocated under Digital India Program to build a strategic Ecommerce platform for registered MSMEs and that too on fast track . 

Post COVID19 apocalypse, the entire supply chain having broken due to many MSMEs part of the supply chain having succumbed to cash flow crunch  and lost labor an attempt to kickstart by the surviving MSME will be atleast aided by this strategy and provide some relief. 

In the first stage the Government run Ecommerce  digital architecture will help MSME connect with low cost and verified suppliers and traders. 

With no dearth of IT technology in India such a platform can be built within a fifteen day period says, AIAI. 

As it is the matter of connecting the already existing database of existing registered MSMEs with the Ministry of Commerce and others. The GoI can use emergency powers to implement this new approach and the countrys  MSMEs could go live within 3-4 weeks with the help of a top team working round the clock. 

At the moment this platform can provide new connects in terms of supply and sale however , later improvisions will enable a multitude of applications. 

It is very true that MSMEs are the backbone of the Indian economy as they contribute not only 40% of the GDP but give employment. However, the factors that affect MSME are finance, availability of cheap raw materials, market for finished goods, skilled labor, cost effective and quality technology with upgrades.
If MSMEs need to flourish then availability of these mentioned inputs becomes inevitable. However, in the Indian scenario most of MSMEs remain starved for the want of assistance in this matter. 

In the second stage, an integration of these services on a common ecommerce portal will help and make availability of these inputs easy for the MSMEs. Moreover such a portal will have  many advantages, 

1. Creation of MSME database on basis of verification
2. Use of BIGDATA analysis to tap the future order requirement and make suppliers to keep inventory ready
3. One can use Blockchain technology to map the supply of orders and sale of value added products, types of skill set supply etc. 

The ecommerce portal will thus register sale of intermediaries, sale of value added products for bulk to wholesalers and retailers along with registration of skilled labor for employment and not the least credit and lending products by banks and NBFCs which can opted on the portal itself. 

Thus an ecommerce portal will not only have a retail function but will at the same time have a polyvalent approach integrating of supply, sale and employment.  The registration of credit agencies will help the MSMEs with information about various banking products at one go . The portal also can provide chatbot service for better interface. At the same time there will be creation of a rich database of various aspects of MSME. 

In the third stage the Ecommerce application can be enabled by global task force of fintech and digital technology businesses to channel the collaboration and urgency between global and domestic player to build a dedicated digital SME fast lending solution from scratch which can help Foreign Institutional Investors to map potential investment into MSMEs using this highly dedicated, verified and Government of India monitored E-Business Platform. 

On financing side this solution would not be a new lending bank but  simply a tactical mechanism for funneling money from banks and other institutions  to SMEs more rapidly by breaking the funding logjam that threatens to put so many SMEs out of business, radically accelerating the approvals, onboarding and payment processes.
In the fourth stage this digital fast lending concept can also combine with globally available technology and platforms potentially allowing it to be adapted and rolled out to different markets across the world. 

The WTO can play an important role in seeking  mandates by world governments to connect to each other .
 Thus the GoI backed Ecommerce platform will play an important part in connecting Indian businesses to each other and also with foreign parties and at the same time will help seek domestic and international finance along with skilled employment. 

In view of business opportunities in business and trade post COVID19  there will be no deglobalisation but definitely there will be realignment in global business opportunities. In such circumstances such Ecommerce platforms can play a vital role in taking advantage of the new opportunities and alignments.
We hope are suggestions are taken in good spirit of development of the economy in order to boost its growth.