India’s small and medium-sized export enterprises (MSMEs) are facing a double whammy – a significant rise in freight charges and a dramatic increase in turnaround times for cargo shipments. This is according to a recent report by the Federation of Indian Micro and Small & Medium Enterprises (FICCI).
The report details how these rising costs and delays are severely impacting MSMEs. Increased freight charges have forced many to halve their output, with most currently operating at only around 50% capacity. Turnaround times for shipments to Europe and the US have also doubled, reaching an average of 60-70 days compared to the previous 25-day average. These delays significantly impact cash flow and overall business operations.
The article cites FCCI officials who claim small businesses are bearing the brunt of these issues. While larger companies have more resources to navigate these challenges, MSMEs lack the financial buffers to absorb such drastic increases. This situation threatens the competitiveness of Indian MSMEs in the global market.
Source: Financial Express