The government must review its policy to allow foreign direct investment up to 24 per cent in the small and medium scale enterprises, and ensuring better credit facility and technology financing to make them globally competitive, industry experts said on Wednesday.

"Direct benefits of FDI have not permeated down to the SMEs," Prabir Sengupta, director, Indian Institute of Foreign Trade, said at a workshop on Technology Financing for SMEs.

He suggested a review of the present FDI policy including the provision of foreign equity up to 24 per cent for SMEs.

Inaugurating a workshop, Sengupta said SME sector was important to the economy as it constitutes about one-third of India's total exports and contribute 7.0 per cent of the country's GDP.

Outlining the challenges before the sector, which accounts for 95 per cent of the industrial units and employs more than 17.8 million people, Sengupta said small companies should be provided cheaper loans instead of subsidies.

In an era of techno-globalisation which marks internationalisation of technology and globalisation of economy, Sengupta said the training system must also change to develop the sector.

In his keynote address, Principal Advisor to CII, Y S Rajan, said that while it is important for the SME units to be skill-specific, they must also think globally and operate in the global market.

Rajan, who co-authored India 2020 - A Vision for the New Millennium with President APJ Abdul Kalam, also said that mere inventing a technology is not sufficient.

It is equally important to bring that technology into production and ensure a proper delivery system so that it can be used, he said.