MSMEs Have Bounced Back Post-Covid Robustly: Icrier Survey

Belying the general fear of excessive damage caused to micro-small and medium enterprises (MSMEs), by Covid-19, the ‘Annual survey of Micro, Small and Medium Enterprises (MSMEs) in India: The Role of Digitalisation in Enterprise Development’ brought out by the Indian Council for Research on International Economic Relations (Icrier), mentions of their ‘robust performance’ in recent years.

“Post Covid-19, MSMEs have demonstrated remarkable resilience,” the survey said.

“Contrary to the common perception that MSMEs are generally vulnerable and distressed units, Icrier’s study, based on a survey of 2,365 Udyam-registered manufacturing sector MSMEs, indicates a robust performance in recent years. Since 2021, a majority of surveyed firms have seen sales growth, improved profit margins and hiring—showcasing enterprise growth and development,” it says. Udyam registration is carried out by the Union Ministry of MSMEs.

“Digitalisation is a key driver of accelerated growth. Firms that have integrated with e-commerce platforms have outperformed the non-integrated ones, benefiting from faster expansion and many more opportunities opening up,” the survey said, adding that it offers significant second-order benefits beyond business growth.

The Icrier survey highlighted that firms integrated with e-commerce platforms experience better access to finance, international markets, and critical business information—irrespective of their size—which significantly contributes to enterprise development.

Access to finance remains a persistent challenge, but it is not insurmountable. The study finds that as firms grow, financial constraints ease. E-commerce integration helps mitigate financial barriers by fostering business expansion and creating a stronger information ecosystem for MSMEs that helps them overcome a lack of collateral.

Also, e-commerce serves as a gateway to global trade, particularly for micro-enterprises. The majority of export-oriented firms that are integrated on e-commerce platforms are leveraging e-commerce platforms to reach international markets. These include a significant percentage of micro firms also, proving that even smaller and less productive firms can access global opportunities through digital channels.

It is essential for the government to create a supportive digital ecosystem that empowers MSMEs to leverage e-commerce opportunities, the survey said. “Taking measures to strengthen cybersecurity, enhancing access to technology, and bridging information gaps will be the key to unlocking the sector’s untapped potential,” it said.