24% Indian SMEs eyeing offshore expansion by 2013


Buoyed by a positive economic outlook, an increasing number of Indian SMEs are considering becoming international by 2013, states a recently published HSBC research.

According to the biennial HSBC research, the number of Indian SMEs conducting international business activities may surge to 56% in 2013 from the current 31%, primarily driven by increasing interest among domestic small players to expand business overseas. Around 24% SMEs across India are eyeing offshore expansion in the next two years, states the research.
Moreover, the research findings indicate that the outlook for capital expenditure of a majority of SMEs is likely to remain stable, while some may increase the same and around 1% may consider reducing capital expenditure. On the brighter side, most SMEs plan to carry out aggressive recruitment over the next six months, generating employment opportunities and contributing significantly to the GDP growth.

Confidence level
The confidence level of Indian SMEs increased the most as compared to that in any other country in Asia during the last quarter of 2010, revealed the HSBC research after gauging these players on parameters such as local economic growth, capital investment plans and recruitment drives.

Dheeraj Dikshit, head (SME ) at HSBC India also confirmed of the rising interest among Indian SMEs to go offshore, supported by booming confidence level and growing economic conditions.

The biennial research also pointed out that the present positive outlook on local economic growth is expected to maintain the same pace over the next six months, while some respondents expect the tempo to rise.

Agreeing to HSBC research findings, Manish Goel, vice president at the Indian Industries Association said to a Bizxchange correspondent, “Indian SMEs are currently riding high on confidence and several players in the textile and handicraft sectors are planning to have global presence in the coming years.”

According to Dinesh Agarwal, founder and CEO of IndiaMART.com, “SMEs are the propellers of the Indian economy. While they contribute immensely to the country’s GDP, they still lack proper impetus from the government for their growth. With business conditions in global markets becoming favourable, some of these businesses are looking at exploring avenues of growth there. Though this presents an interesting growth prospect, I believe our SMEs need to become globally competitive first. Overseas markets are unknown territories for them and differ from the market scenario in our country. Considering their quick adaptability, I am certain that many SMEs will successfully expand their businesses offshore in the next two years.”