How did MSMEs weather global crises from covid to war shocks?

Subscribe to enjoy similar stories.India’s nearly 80 million micro, small and medium enterprises (MSMEs)—employing over 328.2 million people and contributing 31.1% to gross domestic product (GDP), 35.4% to manufacturing output, and 48.58% to exports—have been navigating a harsh global environment over the past five years. From the covid-19 pandemic-induced economic standstill to cost shocks triggered by the Russia-Ukraine war, recurring volatility in West Asia, and trade disruptions under the Trump administration, the sector has faced repeated stress.

Mint explains how the sector has weathered these challenges.The pandemic was a full-blown disruption—demand collapsed, supply chains broke, and labour migration stalled production. Just as activity resumed, the Russia-Ukraine war pushed up prices of crude oil, metals and fertilizers, sharply raising input costs.

Tensions in West Asia added further volatility to energy prices and shipping routes. Even before this, US President Donald Trump's tariff actions had made export markets more uncertain.

For MSMEs, this meant operating in an environment of volatile demand, rising costs and frequent supply disruptions rather than a single one-off crisis.“Recurring tensions in West Asia have kept freight rates volatile, with container shipping costs rising nearly fourfold during peak disruption periods and remaining structurally elevated. Earlier, the US-China trade tensions (2018-20) had already weakened global demand and supply chain predictability, impacting export-oriented MSMEs,” said Vinod Kumar, president, India SME Forum.The covid shock was the deepest.