SIDBI Plans Industry Development Associations to Promote Cluster Innovation for MSMEs with Digital Push

SIDBI initiated a low cost and self-propelling model of cluster development through its national scheme, also known as Development of Industry Associations (DIA). The National Conclave on DIA was inaugurated by M Nagaraju, Secretary DFS, Ministry of Finance, on September 24, 2025 in New Delhi, according to ET.

The conclave saw participation from around 125 representatives from around 90 industry associations, all across the country including 8 industry associations from 4 north-eastern states. The Industry Associations represented sectors including engineering, plastic, printing, textiles, food processing, furniture, jewellery, electronics, etc.

Manoj Mittal, CMD, SIDBI told ET that strong clusters need strong industry associations for infrastructure, trained human resource and initial activities in a flexible and demand driven approach and secondly digitally strengthen the eco-system through a portal created. The portal will support all registered associations and their members to participate and do research on topics of their interest, networking and learning, getting updated information and posting and getting solved their financial and technical requirements.

Mittal further told ET that the ultimate objective is to create financially sustainable industry associations which will have an action plan, will provide strategic services to its members.

Innovation, Not Just Infrastructure

The goal of this new SIDBI initiative is to promote self-driving ecosystems rather than just fund projects. SIDBI's current mission is to seed the architecture that will enable industry bodies to become proactive change agents, rather than merely providing grants. The digital portal is a capacity-builder as well as a platform. It transforms associations from passive membership bodies into dynamic service hubs by making them smarter, more responsive, and more connected.

The strategy is similar to what has been learnt from other successful attempts. Over a ten-year period, for instance, farmer producer organisations (FPOs) in India expanded to 44,000 units, earning their own income through the provision of aggregation, marketing, training, and logistical services. Replicating that success logic in non-farm sectors is the goal.

By distributing capacity, skills and digital tools to the grassroots via associations, SIDBI is attempting to scale development bottom-up, rather than top-heavy, one cluster at a time. The associations can act as the connective tissue—pooling demand, negotiating scale and offering customised services.