Tanstia Chief Says West Asia Conflict, Rising Costs Pressure MSMEs

Units grappling with rising costs, says expert at Vettri Tamil Nadu MSME Summit 2026

Micro and small enterprises across the country are facing an extremely challenging phase, with the West Asia conflict and rising production and operational costs adding to pressure on their businesses, S. Vasudevan, president of the Tamil Nadu Small and Tiny Industries Association (Tanstia), said in Chennai on Friday.

Rising costs weigh on MSMEs

Speaking at the Vettri Tamil Nadu MSME Summit 2026 organised by FICCI, Vasudevan said the increase in operating expenses was affecting enterprises across several areas.

“In particular, the steep increase in gas prices, rising raw material costs, transportation expenses, power-related challenges, labour costs, and financial constraints have placed tremendous pressure on the MSME sector,” he said.

The concerns cover both production-related expenses and the broader costs involved in running a business, including transportation, power, labour and access to finance.

Vasudevan said MSMEs play a critical role in employment generation, exports, innovation, regional development and inclusive economic growth.

He added that strengthening the sector was essential for achieving the vision of a $1.5 trillion Tamil Nadu economy.

Appeal for financial prudence

Against this backdrop, Vasudevan appealed to entrepreneurs and industrial members to exercise caution in managing their finances.

“In this difficult business environment, we sincerely appeal to all entrepreneurs and industrial members to exercise utmost prudence in financial management, optimise operational efficiency, avoid unnecessary expenditure, and focus on maintaining business stability and long-term growth,” he said.

P.N. Vasudevan, managing director of Equitas Small Finance Bank, said many MSMEs were struggling, especially micro units.

He pointed out that small-scale trading units were not covered by government schemes.

“Government should start thinking about how to support these micro units,” he said.

The remarks focused on the pressure faced by smaller enterprises and the need for financial management, operational efficiency and support for micro units.

Source: The Hindu