Iran war to shear 100 bps off MSMEs revenue in FY27

PTI New Delhi

Headwinds stemming from the ongoing conflict in West Asia will hit micro, small and medium enterprises (MSMEs) in India hard this fiscal year, impacting both revenue and profitability, with clusters like Morbi, Firozabad, Surat and Vadodara seen most hit, Crisil stated on Tuesday.  

According to projections in the latest MSME Report of Crisil Intelligence, revenue growth will moderate to 7.5–8.5%, down 100 basis points (bps) compared with FY26, while EBITDA margin will decline 50–100 bps to 5–5.5%. The report, a twice-a-year publication that covers 69 sectors and 147 clusters representing aggregate revenue of ₹75 trillion, which is approximately 20–25% of the GDP of India and two-thirds of the MSME universe, paints a sobering picture.  

The forecasts would have been more subdued but for the domestic gems and jewellery market, which is experiencing a value-led expansion, driven by a surge in gold prices, Crisil stated. However, it observed that such impact is not unprecedented. Amid the pandemic, large players had seen revenue decline by up to 1% in FY20 and FY21, while MSMEs experienced a 3–5% drop.

Small biz loan growth slows, early signs of stress visible amid W Asia war

India's MSME credit growth has moderated, with early signs of stress emerging in micro businesses and manufacturing-related sectors amid global uncertainty, according to a report. The MSME exposure (MSMEx) portfolio outstanding stood at around Rs 46 lakh crore as of April 2026, registering a 12.8% year-on-year growth, supported by improved asset quality, broader sectoral participation and policy support measures, credit information company CRIF High Mark said in its latest report. However, the pace of growth slowed considerably, with portfolio outstanding rising only 3.1% between December 2025 and April 2026, compared to 9.7% growth in the corresponding period a year ago. Active loans declined 3.5% during the period against a 3% growth in the year-ago period.