Page 78 - DMGT401Business Environment

Unit 2: Industrial Policy and Regulatory Structure

Notes
4. Non-availability of technically trained human resources
5. Emphasis on production and not on production costs

6. Lack of management skills
7. Lack of access to technological information and consultancy services
8. Isolation from technology hubs
9. Low Capital base

10. Concentration of functions in one/two persons
11. Inadequate exposure to international environment
12. Inability to face impact of WTO regime
13. Inadequate contribution towards R&D

14. Lack of professionalism
SMEs in Indian Sector: Issues and Prospects
In this section we shall endeavor to analyze the specific issues and prospects that present
them selves in certain specific sectors within SMEs. Each sector presents certain unique
problems and the ways to tackle them are equally novel. Apart from certain secondary
data which the authors have relied upon to describe the situation of SMEs in India, in the
garment, electronic and automotive sectors, and primary information was also collected
by the authors through the personal interview to find out first hand about SMEs in the
packaging industry in the Indian context.
Garments

The garment industry is one of the dynamic sectors of the Indian economy, which is
growing at a rate of 20 per cent per annum for the past two decades. It is also one of the
major employment generating industries and larger earners of foreign exchange for the
country. As regards the market, the Indian garment industry serves both the international
and domestic market. However, the two segments of the market are independent of each
other in terms of the units serving and the nature of product.
Prospects for Garment Industry

In order to effect the changes, the Indian garment industry has to undergo a total
metamorphosis.
1. Dealing with the manufacturing and marketing of the products directly. Direct
dealing with the manufacturing demands immediate in-house tailoring operations
and vertical integration of as many operations as possible in the long run.

2. Vertical integration is expected to bring the requisite scale besides control over
technology, quality and delivery.
3. A shift from low quality manually-operated machinery to power-driven machinery
is essential to ensure speed and quality.
4. Marketing through direct channels like manufacturer-importers and developing
strategic alliances with these will help Indian units to get to know the markets as
well as technological changes and will equip them better to deal with the rapid
market changes.

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