IIM Lucknow, conducted the ‘India SME Conclave’ at its campus on Monday, 21 December 2009. Held in association with the Indian Industries Association (IIA) and Ministry of Micro, Small and Medium Enterprises (MSME) the theme of the conclave was ‘Low cost financing options and the impact of Free Trade Agreements on the SME sector in India’, with special emphasis on Indo-ASEAN Free Trade Agreement (FTA).

The conclave saw participation from representatives of the three pillars of economy – the polity, the academicians and the practitioners. The first half of the conclave saw panel discussions in which the following dignitaries participated: Mr. Pravir Kumar, Joint Secretary, MSME; Prof. Sukumar Nandi, Prof. M Akbar, Prof. K G Sahadevan of IIM Lucknow and Prof Biswajit Nag of IIFT. The speakers delved on the impact of the ASEAN FTA on the Indian SME sector.

The professors talked about impact of the previous FTA that India had with Thailand, Sri Lanka and Singapore. While the practitioners expressed concern over the upcoming FTA with ASEAN, the academicians helped them understand the benefits of having access to larger markets. The professors encouraged the practitioners to think beyond national boundaries and to set up manufacturing/service facilities outside the country.

The speakers stressed on the need of innovation for improving the scale of operations of the current SMEs. They also conveyed their wish that the industry associations should apprise the government about their concerns so that detrimental decisions regarding the product lists involved in the FTAs are averted. The delegates from the industry clarified many doubts regarding the fine print of the FTA.

The post-lunch sessions witnessed presentations by Mr. Chaubal of SBI; Mr. Gunasekharan of SIDBI; venture capitalists Mr. Shailesh VIkram Singh of 2i Capital; Mr. Ajay Kapur of SIDBI Venture Capital; Mr. Paul Joseph of MCX-SX, which is a stock exchange for SMEs in India and Prof Vinay Kumar of IIM Lucknow.
 
The bankers apprised the participants of the various products that they have designed specifically for the SMEs to reduce the cost of financing. The venture capitalists explained their methods of financing organizations which had high risk profiles but very promising ventures. They explained how different financing options were available at each stage of the organizational life cycle. The dignitary from MCX SX talked about the secondary market financing for SMEs which were not big enough to register at the national stock exchanges like NSE and BSE. Prof Vinay Kumar brought about the perspective of the investor in evaluating firms and suggested areas of improvement so that financing from alternate sources could be possible at lower costs.

The objective of the conclave was met at the end of the day and the participants appreciated the creation of such a platform where they could pose their concerns and get instant solutions from eminent speakers. The conclave has been an indication of the role that institutions can play in ensuring the prosperity and success of Indian SMEs.

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