India's bullet train projects to create $51 billion biz opportunity for MSMEs

The proposed Rs 98000-crore Mumbai-Ahmedabad bullet project along with the diamond quadrilateral project that seeks to build 6,000 km of high-speed rail network is capable of creating $51 billion business opportunity for the MSME sector, according to a report by domestic agency Smera Ratings.

The report states that $51 billion window of opportunities can be created for the Micro Small and Medium Enterprises if the government makes 30 per cent mandatory sourcing from them for these projects.

Collectively 28 per cent MSMEs in the special purpose machineries, fabricated metals and printing among other sectors will gain from these mega projects in that case.

Over the next 10 years, if the projects go as planned, the report said, it they can change the face of MSMEs in terms of technology absorption and innovation, apart from creating a large channel of funding opportunities for them.

These projects can help MSMEs gain an additional 3.7 per cent of their annual manufacturing GCF due to the cheap additional debt made available through the projects.

In terms of fund needs, the bullet train network can potentially add 1.5 per cent to MSMEs' debt shortfall over the next 10 years, the report said, adding despite this there will still be an additional debt gap of USD 19 billion for them.