A cluster is a sector targeted geographical concentration of micro and/ or small & medium enterprises (MSMEs/MSMEs), service providers and institutions faced with common opportunities and threats. In other words, a cluster of MSMEs is a concentration of economic enterprises, producing a typical product/service or a complementary range of products/services within a geographical area. The location of such enterprises can span over a few villages, a town or a city and its surrounding areas. Thus a cluster of MSMEs, hereafter referred to as “cluster”, is identified by the ‘product/service’ that the micro and small enterprises produce and the ‘place’ where the enterprises are located. Foundation for MSME Clusters assists institutions in undertaking cluster based local area development, effectively and inclusively in developing and transition economies.

Give rise to collective benefits, for example through the spontaneous inflow of suppliers of raw materials, components and machinery or the availability of workers with sector specific skills.

Favour the creation of providers of specialised technical,administrative and financial services.

Create a conducive environment for the development of inter-firm co-operation as well as of co-operation among public and private institutions to promote local production, innovation and collective learning.

FAround 636 SME (industrial) and 6000 artisan/micro enterprises clusters are estimated to exist in India.

The micro and SME clusters in India are estimated to have a significantly high share in employment generation.

India has a rich tradition in traditional industries. The eco-friendly products of traditional industries not only have great potential for growth in production and export but can also lead to widespread generation of employment opportunities in the rural areas of the country. With a view to making the traditional industries more productive and competitive and facilitating their sustainable development, the Central Government announced the setting up of a fund for regeneration of traditional industries, with an initial allocation of Rs. 100 crores. Pursuant to this announcement, a Central Sector Scheme titled the “Scheme of Fund for Regeneration of Traditional Industries (SFURTI)” has been drawn up and approved at a total cost of Rs. 97.25 crores. The Union Ministry of Agro and Rural Industries (ARI) and its organisations and institutions, in collaboration with State Governments, their organisations concerned, non-Governmental organisations, etc, will implement the Scheme.