MSMEs in a Volatile Global Economy: Why Budget 2026–27 Must Become a Course Correction

Exchange rate fluctuations are a fact of global trade, but their burden is unevenly distributed. Micro exporters lack the scale, expertise and capital to use complex hedging instruments. As a result, currency swings can wipe out margins overnight.

The proposal for a forex fluctuation protection scheme tailored to micro enterprises highlights a gap in India’s financial architecture. Markets provide hedging tools, but public policy must ensure access and affordability where markets alone fail.

Logistics Shocks and Market Access

Recent years have exposed the fragility of global logistics. Container shortages, volatile freight rates and disrupted shipping routes have disproportionately hurt small exporters, often pricing them out of international markets.

Targeted freight equalisation support during abnormal disruptions is not a permanent subsidy, but a stabiliser. Without such measures, micro enterprises risk losing hard-won export markets permanently to larger competitors.

Why Budget 2026–27 Matters

The appeal from MSMEs underscores a fundamental economic truth: micro enterprises are the first to be hit by shocks and the last to recover without support. Their failure does not merely reduce output; it destroys livelihoods, weakens supply chains and undermines inclusive growth.

For a country seeking to leverage manufacturing as a development strategy, neglecting micro enterprises is not fiscally prudent—it is economically self-defeating.

Beyond Relief: A Shift in Policy Philosophy

What MSMEs seek is not perpetual protection, but recognition of structural vulnerability. Policy must move from episodic relief to built-in resilience—through counter-cyclical credit, risk-sharing mechanisms, simplified compliance and targeted support during global disruptions.

Budget 2026–27 thus presents a moment of course correction. It can either treat MSME distress as a temporary inconvenience, or recognise it as a systemic challenge requiring calibrated, long-term solutions.

Conclusion

In an era of volatile global trade, sustaining micro enterprises is not an act of generosity but of economic foresight. MSMEs anchor employment, stabilise supply chains and translate growth into livelihoods. If India’s development strategy is to be durable and inclusive, Budget 2026–27 must acknowledge that resilience at the bottom determines strength at the top.