Cluster Financing
CLUSTER FINANCING
Definition of Cluster in the Indian Context
Clusters can be defined as Sectoral and geographical concentration of enterprises, in particular Small and Medium Enterprises (SME), faced with common opportunities and threats which can:
a. Give rise to external economies (e.g. specialized suppliers of raw materials, components and machinery; sector specific skills etc.);
b. Favour the emergence of specialized technical, administrative and financial services;
c. Create a conducive ground for the development of inter-firm cooperation and specialization as well as of cooperation among public and private local institutions to promote local production, innovation and collective learning.
Importance of Clusters in the Indian Context
With a contribution of 40% to the country's industrial output and 35% to direct exports, the Small and Medium Industry (SME) sector has achieved significant milestones for the industrial development of India. Within this sector, an important role is played by the numerous clusters that have been in existence for decades and sometimes even for centuries. India has the richest diversity of clusters. The clusters are categorized as:
Artisanal Clusters
Industrial Clusters
The products covered by artisanal clusters include textile, handlooms, handicrafts, woodcrafts, metal and stone crafts, jewellery, leather, pottery & clay, etc. The industrial clusters include processed food, rice milling, readymade garments, terry towel, wet grinder, engineering, machine tools, handtools, foundry, brass parts, rubber and pharmaceuticals cluster.
There are more than 6500 industrial, artisan and micro enterprise clusters2. These clusters represent the socio economic heritage of India, where some towns or villages are known for a specific product for decades and centuries. It is estimated that these clusters contribute 60% of the manufactured exports from India. The clusters in India are estimated to have a significantly
Definition of Cluster in the Indian Context
Clusters can be defined as Sectoral and geographical concentration of enterprises, in particular Small and Medium Enterprises (SME), faced with common opportunities and threats which can:
a. Give rise to external economies (e.g. specialized suppliers of raw materials, components and machinery; sector specific skills etc.);
b. Favour the emergence of specialized technical, administrative and financial services;
c. Create a conducive ground for the development of inter-firm cooperation and specialization as well as of cooperation among public and private local institutions to promote local production, innovation and collective learning.
Importance of Clusters in the Indian Context
With a contribution of 40% to the country's industrial output and 35% to direct exports, the Small and Medium Industry (SME) sector has achieved significant milestones for the industrial development of India. Within this sector, an important role is played by the numerous clusters that have been in existence for decades and sometimes even for centuries. India has the richest diversity of clusters. The clusters are categorized as:
Artisanal Clusters
Industrial Clusters
The products covered by artisanal clusters include textile, handlooms, handicrafts, woodcrafts, metal and stone crafts, jewellery, leather, pottery & clay, etc. The industrial clusters include processed food, rice milling, readymade garments, terry towel, wet grinder, engineering, machine tools, handtools, foundry, brass parts, rubber and pharmaceuticals cluster.
There are more than 6500 industrial, artisan and micro enterprise clusters2. These clusters represent the socio economic heritage of India, where some towns or villages are known for a specific product for decades and centuries. It is estimated that these clusters contribute 60% of the manufactured exports from India. The clusters in India are estimated to have a significantly