Bikky Khosla | 19 Jun, 2025
For someone closely tracking India’s small business ecosystem, I have never seen global headwinds align with such relentless force. The ongoing Iran-Israel conflict, uncertainty over US trade tariffs and the growing diplomatic ambiguity between India, Pakistan, and Washington are all converging into a perfect storm - and Indian MSMEs appear to be caught right in its path.
There is no arguing the fact that these geopolitical tensions are affecting the MSME ecosystem badly due to rising logistic costs, and making markets highly unpredictable.
Then again the current Iran-Israel conflict has added to the woes of Indian MSMEs which already operate on razor-thin margins. The conflict has set the global energy market on the edge raising fears of rising input costs, inflated shipping charges, and disrupted timelines.
Compounding the troubles is the uncertainty in India-US trade dynamics. Despite public claims of improving ties, the tariff concerns are still looming large. India continues to face unpredictable barriers when it comes to steel, aluminium, and various agricultural goods. Even digital services are under scrutiny.
For small businesses that export to the United States, this is deeply unsettling. One day they are encouraged by trade optimism, the next they are bracing for new duties or restrictions. It becomes difficult to plan production cycles, pricing, or even hire confidently.
In my opinion, the Indian MSMEs are in a precarious environment where rising costs, supply chain disruptions, inconsistent trade policies, and volatility in demand across key export destinations like the US and Europe are severely affecting their ability to plan, grow and compete in the markets.
The Centre must quickly and decisively shield MSMEs from the global turbulence. There is an urgent need to offer freight subsidies or logistics support for MSME exporters, especially those in price-sensitive sectors. The government must also help in diversifying exports to ASEAN, Africa, and Latin America as during these times we can’t afford to appear as an unreliable or reactive partner in any trade or geopolitical equation.
This moment demands more than wait-and-watch. It demands bold leadership, quick implementation, and a refusal to let MSMEs become collateral in a battle they neither started nor benefit from.
Because when MSMEs falter, India falters too.
