Industry bodies World Trade Centre Mumbai and the All India Association of Industries (AIAI) have urged the government to introduce targeted, time-bound measures in the Union Budget 2026-27 to ease credit stress and export constraints faced by micro and small enterprises, warning that structural disadvantages threaten jobs and manufacturing capacity.
In a policy memorandum submitted to the Union Finance Ministry, the two organisations said MSMEs were bearing a disproportionate burden of high borrowing costs, delayed payments and rising compliance expenses, compounded by repeated global economic disruptions. MSMEs account for about 45 per cent of India’s exports and nearly 30 per cent of gross value added, according to the industry bodies.
Chairman of World Trade Centre Mumbai and President of AIAI, said access to affordable finance remained the sector’s single biggest challenge. He called for a national, real-time credit evaluation framework that links invoices and payments through the Goods and Services Tax Network, enabling trade credit to be used as a formal financing tool.
Such a system would allow lenders to assess firms based on verified cash flows and payment behaviour rather than historical balance sheets, he said, adding that the reform would not require budgetary expenditure but could significantly ease the credit crunch faced by small businesses.
The memorandum also highlighted the impact of recent geo-economic shocks on export-oriented MSMEs and urged the government to place greater emphasis on developing newer markets. He said that signing trade agreements and promoting borderless commerce would help MSMEs integrate more deeply into global supply chains, supporting India’s longer-term economic ambitions.
In addition, the industry bodies called for a clear policy framework for pre-shipment financing to support MSMEs from production to port, along with budgeted assistance for e-commerce onboarding, logistics integration and export documentation. These measures, they said, would enable smaller firms to participate more effectively in domestic and global value chains.
The recommendations form part of World Trade Centre Mumbai and AIAI’s broader engagement with policymakers, aimed at conveying on-ground economic conditions and strengthening India’s trade, investment and manufacturing ecosystem ahead of the Union Budget 2026-27.
Source from: https://www.businessworld.in/article/msme-bodies-urge-gst-linked-trade-credit-push-in-budget-2026-27-585888
