The rapidly expanding global value chains of multinational corporations are increasingly dominating international trade, which emerging economies like India can hardly afford to ignore. The limited presence of Indian small and medium enterprises in the GVCs of MNCs can be traced back to a negligible share of internationalised SMEs, which is primarily due to a weak innovation base, owing to weak networks of SMEs, particularly weak inter-firm linkages. These issues can be overcome by building and strengthening regional innovation systems and by establishing a multipurpose science and technology commission in the clusters of SMEs.
