IIFT, PayPal partner for research on digitalization, export performance of Indian MSMEs

IIFT and PayPal are conducting the research on effects, difficulties and possibilities posed by digitalization on Indian MSME sector.

IIFT (Source: Official Facebook Account)IIFT (Source: Official Facebook Account)

Vagisha Kaushik | July 1, 2022 | 07:20 PM IST

NEW DELHI: The Indian Institute of Foreign Trade (IIFT) is collaborating with PayPal to conduct a study exploring the impact of digitalization on the trade performance of the Indian MSME sector. The study is being headed by Manoj Pant (Professor and Vice-Chancellor, IIFT), along with co-principal investigators, Sugandha Huria and Neha Jain (Assistant Professors of Economics) and research associates, Kriti Sharma and Ashley Jose.

The study focuses on Indian MSMEs which have rightfully received the tag of ‘Indian economy’s backbone’. Given their sizable contribution in the country’s exports, employment, and GDP, their growth prospects cannot be neglected. In recent years, digitalization has emerged as a key driver of business growth, especially after the onset of COVID 19 pandemic and its disruptive effects on the global economy.

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Consequently, the MSMEs, being inadequately digitalized, have not only missed out on golden opportunities of growth but also suffered a blow in terms of lower revenues, falling demand, and increasing liquidity crisis. This poses a serious threat to the growth prospects and international competitiveness of Indian MSMEs. The study will delve deeper into the impact, challenges, and opportunities of digitalization on Indian MSMEs performance.

The study will deploy multiple resources such as preliminary analysis using existing literature and international trade databases, rigorous empirical investigation using the Centre for Monitoring Economy’s Prowess database and NSSO’s National Sample Survey 73rd round, and confirmatory analyses supported by a primary survey that was conducted jointly by the global leader in digital payments and IIFT.

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The two organizations also organized an online discussion at the launch of Digital Trade Facilitation Forum in October 2021. It brought together various policy experts including the Secretary of the Ministry of MSMEs, B B Swain and Sonia Pant, Assistant Development Commissioner at the Ministry of MSMEs, and MSME exporters to have a discourse on current opportunities, bottlenecks, and possible future strategies with regards to digitalization and export behaviour of MSMEs in India. The inputs from the discussion served as a great value addition to the study.

The study will also raise concerns regarding the digitalization capacity of Indian MSMEs and the role of government schemes and policies in fostering digital transformation and exports among them. The findings from the study will highlight key areas of concerns for policymakers to embolden the digitalization led gains for Indian MSMEs.

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