MSME Times Exclusive
Manufacturing MSMEs across Bharat are facing mounting operational stress, as delayed payments, volatile input costs, unreliable power supply, and limited access to credit squeeze already thin margins.
From power transmission equipment manufacturers in Pune to drone fabrication units in Hyderabad, ground-level enterprises report that systemic inefficiencies are eroding competitiveness and stalling growth.
🔴 Payment Delays Crippling Working Capital
A majority of surveyed MSMEs report payment cycles stretching to 90–120 days, leading to an estimated 25% erosion in effective working capital. Despite government-backed digital mechanisms like the Trade Receivables Discounting System (TReDS), adoption remains low, largely due to bank hesitancy in invoice discounting.
As a result, nearly 60% of manufacturing MSMEs say their expansion plans are on hold, citing liquidity stress as the primary constraint.
⚡ Power Grid Instability Driving Up Costs
Erratic power supply continues to plague industrial clusters. Frequent outages force MSMEs to rely on diesel generator sets, inflating energy costs by nearly 30%. For power-intensive manufacturing units, this has become a major margin killer, especially in semi-urban and rural zones.
🧱 Raw Material Volatility Squeezes Margins
Rising commodity prices have further tightened the noose:
- Steel prices up by ~15%
- Copper prices up by ~20%
With limited pricing power, most MSMEs are unable to pass these increases on to buyers. As a result, net profit margins have shrunk to nearly 5%, making long-term sustainability uncertain.
👩🏭 Women-Led MSMEs Face Higher Credit Rejections
Women entrepreneurs face disproportionate barriers in accessing finance. Survey data indicates credit rejection rates for women-led MSMEs are nearly 10% higher than the sector average, highlighting persistent gender bias in lending practices.
🚚 Rural Clusters Hit by Logistics Burden
Manufacturing units located in rural and remote clusters face logistics costs nearly double those of urban peers, driven by poor infrastructure, limited freight connectivity, and higher last-mile transport expenses. This further weakens their ability to compete in national supply chains.
⚠️ Structural Issues Need Urgent Attention
Industry voices warn that without faster payment enforcement, stronger TReDS participation, affordable credit access, and infrastructure upgrades, Bharat’s manufacturing MSMEs risk losing momentum at a time when they are expected to play a central role in employment generation and industrial growth.
MSME Times will continue to track ground realities and policy gaps affecting Bharat’s MSME ecosystem.
