Access to finance and ease of doing business remain key issues for India’s medium and small sized companies (MSMEs), the Federation of Indian Chambers of Commerce and Industry (FICCI) president Sandip Somany said at Fortune India’s Next 500 summit on Friday.

Addressing a gathering of midsize companies and policymakers, Somany said the cost of doing business in India has not reduced, and it will happen only when land, labour and capital reforms are pushed. “India is among the highest countries in terms of the real interest rates. And also in the last 12 months the availability of finance particularly for MSMEs has been an area of deep concern,” he said.

Meanwhile, he is optimistic about Prime Minister Narendra Modi’s vision of making India a $5 trillion economy, and believes that it is also the aspiration of all Indians. He says MSMEs will play an important role in achieving this goal.

“Reaching this target requires a broad-based contribution across sectors as we as across enterprises irrespective of their size and scale. Often we believe that the growth is being led by the large corporations. On the other end of the spectrum there are these small and micro firms,” said Somany, who is also the vice chairman and managing director of HSIL Limited. “There is no doubt that both these end of the spectrum are very important.”

He also said that the role of exports is an important factor while talking of achieving the goal of a $5 trillion economy. “At least $1 trillion by 2020 has to be generated in exports as a country, if we need to reach the target of $5 trillion,” he said.

He suggested that in order to do that, India needs to make its companies more competitive. “They need to scale up to be a part of the global value chain to increase their business potential,” Somany says.

He believes that midsize companies are an important engine of economic growth and make a key contribution in employment generation, and that they have received focus and attention of the policymakers in the last 5-7 years.

“They are the ones that have grown to being from small to midsize and have a capability and desire to become large,” he said, adding that it is when MSMEs progress exponentially that jobs and wealth are created, and the economy prospers. “They hold the potential to graduate into the big league in years to come through their focus on technology, creativity and consistent growth which is why there is a need to nurture them and provide them an ecosystem to make their contribution even greater to the economy,” he said.

He also suggested that since midsize companies do not have the bandwidth and the resources to do research across the world, the commerce ministry should help these companies to access information at a rapid rate and zero cost.

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