Strategic Options for SMEs in Steel Sector in Post WTO Era: An Empirical Study in the Indian Context

Abstract

Small and Medium Enterprises have been globally recognized as vital components of a domestic economy and major contributors to employment generation in a country, regardless of global barriers. SMEs form the lifeblood of any vibrant economy. In an emerging economy like India, SMEs have a significant socio-economic role to ensure overall development of the nation.

Steel Sector is an important and booming sector in India. The Indian Steel Industry is undergoing transformation due to the new economic policy and business environment in the post WTO regime. With the delicensing of the entire steel industry and the removal of the restrictions on foreign investments, almost all the important global players have entered in the Indian Industry. It has still a huge scope for either direct entry or through collaborations with the local companies.

This paper examines the problems, strategies for investments, competency development, technological up gradation, quality improvement, Govt. Policies, Equity participation by MNCs and overall improvement of this sector in the post WTO regime. The study has been done by using data acquired from an extensive survey of Indian SMEs in the Steel Sector and from the experienced Bankers/ Officials/Policy makers of Govt. of India.

Keywords: SMEs, WTO, Technological up gradation, Equity Participation, Performance, Gross Domestic Product, Steel Sector, Financial requirement