MSMEs Need Protection Not Just Promotion

29 Jun 2026 CW Team

The report centres on enterprise security, framing survival of small businesses as a fundamental economic priority comparable to National Food Security. It notes that while all firms face risks from downturns, geopolitical conflicts and health emergencies, MSMEs are disproportionately vulnerable. The institute identified structural weaknesses such as limited access to finance and technology, shrinking margins and market uncertainty that demand durable policy responses.

ISED cited the Covid-19 pandemic and tensions in West Asia as examples of asymmetric lagging vulnerability, where impact appears after a delay as costs rise, demand weakens and employment falls. The institute said traditional crisis relief, including emergency credit, tackles only immediate needs. It argued that a longer term framework is required to absorb cascading risks and prevent firm failures.

The Enterprise Security and Resilience Framework calls for coordinated action by governments, banks, insurers and promotional agencies to help entrepreneurs manage cascading risks to viability. ISED Director Dr P.M. Mathew argued that entrepreneurship is a public good and that governments must ensure access to essential public goods such as affordable credit, technology and market opportunity. The framework seeks to align financial and policy instruments to provide persistent support.

The report urged a policy shift from promotion to systematic de-risking to strengthen a sector that contributes to employment, innovation and economic growth. The Organisation for Economic Co-operation and Development (OECD) described the framework as an innovative contribution to global discussions, and a former regulator urged closer banking and insurance convergence.

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The Institute of Small Enterprises and Development (ISED) proposed a policy framework arguing that India’s micro, small and medium enterprises require protection from volatile global economic shocks rather than only promotion. The India MSME Report 2026 was released in Kochi by Mercy Epao, Joint Secretary in the Ministry of MSME. ISED said the approach would move support beyond subsidies and promotional schemes towards comprehensive de-risking. The report centres on enterprise security, framing survival of small businesses as a fundamental economic priority comparable to National Food Security. It notes that while all firms face risks from downturns, geopolitical conflicts and health emergencies, MSMEs are disproportionately vulnerable. The institute identified structural weaknesses such as limited access to finance and technology, shrinking margins and market uncertainty that demand durable policy responses. ISED cited the Covid-19 pandemic and tensions in West Asia as examples of asymmetric lagging vulnerability, where impact appears after a delay as costs rise, demand weakens and employment falls. The institute said traditional crisis relief, including emergency credit, tackles only immediate needs. It argued that a longer term framework is required to absorb cascading risks and prevent firm failures. The Enterprise Security and Resilience Framework calls for coordinated action by governments, banks, insurers and promotional agencies to help entrepreneurs manage cascading risks to viability. ISED Director Dr P.M. Mathew argued that entrepreneurship is a public good and that governments must ensure access to essential public goods such as affordable credit, technology and market opportunity. The framework seeks to align financial and policy instruments to provide persistent support. The report urged a policy shift from promotion to systematic de-risking to strengthen a sector that contributes to employment, innovation and economic growth. The Organisation for Economic Co-operation and Development (OECD) described the framework as an innovative contribution to global discussions, and a former regulator urged closer banking and insurance convergence.

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