The Chamber of Small Industry Associations (COSIA) has submitted an urgent representation to the Hon’ble Minister of Commerce & Industry, Government of India, highlighting the emerging challenges faced by the Indian MSME sector due to the escalating geopolitical tensions in West Asia involving Iran, Israel, and the United States.
West Asia has traditionally been an important export destination for many Indian Micro, Small and Medium Enterprises. The ongoing conflict has begun to impact trade logistics, supply chains, and the availability of critical industrial inputs, raising serious concerns among exporters and manufacturing units across several sectors.
In its representation, COSIA pointed out that export consignments to several West Asian countries are facing disruptions due to disturbed shipping routes and logistics schedules. This has resulted in delays, accumulation of inventories in factories and warehouses, and significant stress on the working capital cycles of MSME exporters.
The association also highlighted the risk of disruption in the supply of LPG and industrial gases, which are widely used in manufacturing operations and heat-based industrial processes. Any interruption in their supply could lead to partial or complete shutdown of industrial units, particularly within MSME clusters that are major contributors to employment generation in the country.
Another major concern raised by COSIA relates to the availability of petrochemical-based raw materials, especially polymer raffia and other polymer grades used extensively in packaging industries. These materials are critical for manufacturing packaging bags used by sectors such as cement, fertilizers, chemicals, and food grains. Disruptions in their supply could severely affect packaging units and downstream industries that depend on them for dispatching finished goods.
COSIA further noted that imports of several industrial inputs from the region, apart from crude oil, may also face disruptions. Such interruptions may lead to shortages, price escalation, and production constraints across multiple MSME sectors. Additionally, the association expressed concern about the possible shortage of domestic LPG cylinders, which could affect restaurants, eateries, and food service establishments, creating economic and social challenges in urban areas.
In view of these emerging challenges, COSIA has urged the Government of India to closely monitor supply chains and take proactive steps to safeguard industrial stability. The association has requested measures to ensure uninterrupted supply of LPG and industrial gases, maintain adequate availability of polymer raw materials, facilitate alternative export logistics routes for exporters facing shipment disruptions, and consider temporary policy support for MSMEs affected by raw material shortages and export delays.
COSIA emphasized that MSMEs form the backbone of India’s manufacturing economy and provide millions of jobs across the country. Timely intervention and policy support will help ensure stability in production, employment, and trade during this challenging global situation.
