BDS Cluster Initiatives

Business Development Services (BDS)

Business Development Services (BDS) are services provided by external business experts (BDS providers) to an enterprise in various functional areas where the enterprise needs improvement, enabling the enterprise to become more competitive and grow. Business Development Services include training, consultancy and advisory services, marketing assistance, information, technology development and transfer, and business linkage promotion, etc.  

The major areas where BDS is provided are:

  • Market access
  • Training and technical assistance
  • Technology and product development
  • Input supply
  • Financing mechanisms
  • Infrastructure
  • Policy advocacy


Cluster Initiatives in India

There are several institutions in India that have undertaken cluster development initiatives across various clusters in the country to meet the socio-economic objectives. The major institutions involved with cluster development initiatives in India include the following:

  • Small Industries Development Bank of India (SIDBI)
  • United Nations Industrial Development Organisation (UNIDO)
  • Development Commissioner (MSME)
  • State Bank of India (SBI)
  • National Bank for Agriculture & Rural Development (NABARD)
  • Textiles Committee
  • Technology Information, Forecasting and Assessment Council (TIFAC)
  • Khadi and Village Industries Commission (KVIC)
  • National Institute for Small Industry Extension Training (NISIET)  [ supported by DC(MSME) ]
  • Entrepreneurship Development Institute of India
  • MSME Foundation (An EDI initiative with support of UNIDO)


Small Industries Development Bank of India (SIDBI)

SIDBI has been implementing various measures / activities to ensure that the Indian SME sector becomes globally competitive. One such initiative is the SME Financing and Development Project, a multi agency / multi activity project addressing both demand and supply side issues concerning Indian SMEs. This is being attempted through provision of financial and non financial services. SIDBI has customized cluster based approach to meet the credit and non-credit needs of the MSMEs in the clusters. SIDBI's cluster approach has been primarily aimed at technology upgradation, entrepreneurship development and environment management, etc.

United Nations Industrial Development Organisation (UNIDO)

The aim of the UNIDO Cluster Development Programme (CDP) in India is to contribute to the overall performance and collective efficiency of the small and medium enterprise clusters for sustainable development by assisting selected local communities of firms and associated institutions in the clusters. This entails the implementation of cluster support initiative in selected pilot clusters as well as assistance to central and local institutions in their programmes of cluster modernisation and restructuring. In the pilot clusters, UNIDO strives to act as a catalyst bringing about the necessary qualitative changes at the cluster level.

At the policy level, the primary purpose of UNIDO’s intervention is to customise its methodology to the Indian settings so that it can be shared with the partner institutions for replication.

To view list of UNIDO assisted cluster, click here.


Development Commissioner (MSME)

The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the cluster development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. Clustering of units also enables providers of various services to them, including banks and credit agencies, to provide their services more economically, thus reducing costs and improving the availability of services for these enterprises.

Objectives of the Scheme:

  • To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.
  • To build capacity of MSEs for common supportive action through formation of self help groups, consortia, upgradation of associations, etc.
  • To create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of MSEs.
  • To set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc).

To know more on the scheme, click here.


State Bank of India (SBI)

The State Bank of India has undertaken cluster initiatives in the form of its Project Uptech. The Project Uptech has been a model in the direction of helping agriculture and small-scale sector to make them more competitive in terms of quality and cost. Under the Project Uptech, the Bank has taken initiative in implementing Energy Efficiency Programme for its SME clients. So far, 25 clusters have been covered under Project Uptech such as rice milling, grape cultivation and pumpsets.

To get more information on Project Uptech, click here.


National Bank for Agriculture & Rural Development (NABARD)

Considering the excellent potential in the cluster approach for rural industrialization and the recognition of NABARD's role in rural clusters by several agencies including the GoI, NABARD had decided in 2005-06, to go in for development of selected clusters on its own by partnering with other government agencies. NABARD had decided to develop 55 clusters (50 clusters on Participatory basis and 5 clusters for intensive development) in a period of 3-5 years starting from 2005-06.  NABARD follows two models of cluster development:

  • Participatory model of cluster development
  • Intensive Development model of cluster development

Participatory Clusters

Under participatory cluster, the approach would be to co-ordinate the efforts of all the agencies involved in carrying out the action plan prepared for the cluster development.  NABARD would be the main promoter and involve its resources wherever assistance is not forthcoming from other agencies/ the other agencies do not have provision for support.  In this mode of Cluster Development, the intervention budget would be limited to Rs.15 lakh per cluster over a period of 3 years.

Intensive Clusters

Under Intensive Development, NABARD would primarily be the source for meeting the resource requirements to fund the planned promotional interventions.  Support from other agencies wherever forthcoming would be utilised. The implementation period for the intensive cluster development would be a maximum of 5 years with an outlay not exceeding Rs. one crore.

To know more on NABARD’s cluster initiatives, click here.


Textiles Committee

Textiles Committee launched a National Programme for capacity building of textile SMEs through cluster based approach on 13th June 2002. The objective of this programme is capacity building of SMEs, through a cluster based approach, by way of fostering the collective efficiency of SMEs and improving the support systems, so that the emerging opportunities on account of globalization and liberalization are exploited. 23 major clusters having concentration of SMEs and where the Textiles Committee has presence were identified for intervention under the programme.

Clusters identified under the programme:

Agartala (Tripura), Nau Patna/Bhubaneswar (Orissa), Bhawani/Coimbatore (Tamil Nadu), Guntur (Andhra Pradesh), Pochampally/Hyderabad (Andhra Pradesh), Ichalkaranji (Maharashtra),  Sangner/Jaipur (Rajasthan), Jodhpur (Rajasthan), Kannur (Kerala),  Kanpur (Uttar Pradesh), Karur (Tamil Nadu), Kolkata (West Bengal), Ludhiana (Punjab), Rajapalayam/ Madurai (Tamil Nadu), Nagari (Andhra Pradesh), Panipat (Haryana), Salem (Tamil Nadu), Solapur (Maharashtra), Surat (Gujarat), & Tirupur (Tamil Nadu).

To know more details on this programme, click here.


Technology Information, Forecasting and Assessment Council (TIFAC)

In 2006, TIFAC initiated SME – Technological Upgradation Programme aimed at providing R&D and Technical support to select clusters of MSMEs through an approach based on establishing and leveraging academia-industry interaction.  

The approach of TIFAC MSME Program starts with a comprehensive assessment of technology needs and gaps of the cluster followed by the design and implementation of targeted technical interventions for the particular cluster by the academic / R&D institutions that act as knowledge partners. The interventions include product / process technology improvement, testing and quality issues, and training / capacity building.

The following clusters have been chosen for intervention:

  • Casting (Howrah, West Bengal – Ferrous)
  • Surgical instruments, (Baruipur, West Bengal)
  • Food Processing (Malda, West Bengal)
  • Sports Goods (Jalandhar, Punjab)
  • Diesel Pumps (Rajkot, Gujarat)
  • Agricultural Implements (Karnal, Haryana)
  • Scientific Instruments (Ambala, Haryana)
  • Rural Pottery (Panchmura, Bankura, W.B., Khurja, U.P.)
  • Carpet Industries (Bhadohi, U.P.)
  • Hand made Paper (Sanganer, Jaipur, Rajasthan)
  • Rubber Cluster (Agartala, Tripura)

To know more details of projects under this programme, click here.


Khadi and Village Industries Commission (KVIC)

KVIC is implementing a programme for promotion of Village Industries Cluster- Rural Industry Service Centre (RISC) for Khadi and Village Industries activity. The Objectives of the Programme include:

  • To provide backward forward linkages to Khadi & Village Industries activities in a cluster
  • To provide services like raw material support, skill up-gradation, training, Quality Control, Testing facilities, marketing promotion, design & product development in order to strengthen the rural clusters.

To know more about RISC programme, click here.


National Institute for Small Industry Extension Training (NISIET) – National Resource Centre for Cluster Development (NRCD)

The National Resource Centre for Cluster Development (NRCD) came into existence in January 2004 at NISIET with the active support of Development Commissioner (SSI), now DC (MSME).

As on date, NRCD is involved in developing 21 clusters all over India. The centre has been training government officials from states like Uttar Pradesh, Kerala, Andhra Pradesh and the North Eastern Region, and of financial institutions like Andhra Bank, NABARD, SBH and SIDBI.

To know more on the 21 clusters and other cluster initiatives of NRCD, click here.


Entrepreneurship Development Institute of India

1. International Centre for Cluster Competitiveness, Growth and Technology

The International Centre for Cluster Competitiveness, Growth and Technology (IC3GT) has been set up at EDI by the Office of the Development Commissioner, Micro, Small and Medium Enterprises, Govt. of India. This centre functions in the form of a control unit to facilitate advocacy of cluster turn-around strategies and plan implementation in a methodical manner. The Centre serves as a repository of knowledge, information and strategic plans.

In the first phase, the Centre has addressed 12 clusters, at a national level. These clusters include Food Processing, Muzaffarpur; Steel Re-rolling Mills, Raipur; Agricultural Implements, Karnal & Moga; General and Light Engineering, Parwanoo; Ready-made Garments, Bangalore & Indore; Gold Ornaments, Thrissur; Brass and Bell Metal, Khurda; Ball Bearing, Jaipur; Leather Footwear, Agra and Leather Goods, Santiniketan. Click here for diagnostic reports on these clusters.


2.National Resource Centre under Integrated Handloom Cluster Development Programme

EDI has set up a National Resource Centre under the Integrated Handloom Cluster Development Programme of the Government of India. EDI would act as the National Resource Agency [NRA] for co-ordination, monitoring and hand holding support of cluster development interventions at 20 locations in the country.

To know more about the functions of the National Resource Centre and interventions in the handloom clusters, click here.


MSME Foundation

At the suggestion of the Ministry of Small Scale Industries, Government of India, the United Nations Industrial Development Organisation (UNIDO) conceptualized and initiated the process of creating the Foundation for MSME Clusters. Subsequently, the Foundation was legally constituted as a non-government, non-profit registered trust under the auspices of the Entrepreneurship Development Institute of India (EDI), Ahmedabad, in the year 2005.

The Foundation for MSME Clusters seeks to achieve the following objectives:

  • Cluster initiatives become inclusive.
  • Cutting edge methodologies, tools, information and resources with respect to a cluster development programme are accessible.
  • Effective linkages emerge between clusters and important thematic institutions in the area of finance, infrastructure, environment, investment, R&D, social responsibility and local governance.
  • Trained and competent professionals and institutions are available to facilitate cluster-based development.
  • Models of strong community based civil society organisations emerge to take up cluster based sustainable development initiatives

To know more on the activities and initiatives of MSME foundation, click here.