'A bleak outlook': MSMEs struggle with volatile external markets

Business Economy

Posted by AI on 2025-08-20 18:17:51 | Last Updated by AI on 2025-08-20 20:25:16

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Small and medium-sized businesses struggle with a volatile external environment, causing significant uncertainty for their growth prospects. Experts highlight the need for tailored policies to support these vulnerable businesses.

In recent years, small and medium-sized businesses (SMBs) operating in countries reliant on export markets have been hit hard by the rise in protectionism and volatile global trade trends. This has led to heightened uncertainty for these businesses, causing significant disruptions to their growth outlook.

Recently, experts have expressed concern about the vulnerability of SMBs operating in export-dependent sectors. Clarissa Malhotra, an economist at the Gordon Institute of Business Science, highlighted that "uncertainty in external demand remains a major drag on growth" for many SMBs. This sentiment was echoed by Ram Singh, a professor at the University of Delhi, who emphasized that signs of distress in growth and employment are visible in sectors reliant upon the US market, with increasingly protectionist policies restricting access to what was once a lucrative export market.

The calls for tailored policies to support these businesses are growing louder. Singh argues that unless targeted policies are implemented to provide stabilization funds and improved credit facilities, many SMBs may be forced to downsize and reduce their workforce, leading to a loss in economic growth and jobs.

Experts agree that more needs to be done to address the challenges faced by SMBs. These calls were recently echoed by 500 Indian SMBs who urged local policymakers to implement stronger reforms to protect them from the impact of globalization.

The vulnerability of SMBs in export-dependent sectors underscores the fragility of many economies in the current global environment. With many SMBs serving as the backbone of their respective economies, governments and industry bodies must address the challenges posed by volatile external markets and rapidly changing trade policies to safeguard domestic economic stability and growth.

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