Politics · India Bureau
India's MSMEs face mounting pressure from geopolitical tensions, costs
Micro and small enterprises across India are navigating an increasingly difficult operating environment, with production and operational expenses continuing to rise amid ongoing geopolitical instability in West Asia, industry experts warned on Tuesday.
LSN India ·
Industry leaders gathered at the Vettri Tamil Nadu MSME Summit 2026 highlighted the acute challenges confronting the micro and small enterprise sector, which forms the backbone of India's manufacturing and employment landscape.
S. Vasudevan, president of the Tamil Nadu Small and Micro Industries Association (Tanstia), said enterprises are grappling with sustained cost pressures stemming from multiple sources. The West Asia conflict has disrupted supply chains and elevated input costs, while domestic production and operational expenses continue their upward trajectory, compounding the financial strain on smaller businesses.
The warnings underscore mounting concerns about the viability of smaller manufacturers and service providers at a time when global economic headwinds are intensifying. Many MSMEs already operate on thin margins and lack the financial buffers of larger corporations to absorb cost shocks.
Industry observers have pointed to the need for targeted policy interventions to support smaller enterprises, including credit access improvements, energy cost relief measures, and support for digital transformation initiatives that could improve operational efficiency.