Over 5,900 MSMEs Shut in Gujarat Amid Economic Pressures

Ahmedabad: Gujarat, known for its industrial prowess, faces a stark challenge with the closure of 5,974 micro, small, and medium enterprises (MSMEs) between July 2020 and November 2024. Data from the Union Ministry of Commerce and Industries, presented in Parliament, places Gujarat third in MSME closures after Maharashtra (15,220) and Tamil Nadu (7,894) during the same period.

The pandemic’s aftermath, compounded by rising inflation and weak demand, has strained small businesses, particularly in the textile and chemical sectors. “Post-Covid stress and inflationary pressures created a domino effect, forcing many struggling MSMEs to shut down,” said Pathik Patwari, chairman of the Indian Chamber of Commerce (ICC), Gujarat.

Patwari highlighted challenges such as limited access to the CGTMSE credit scheme, lack of banking facilities for micro enterprises, and skill gaps that hindered adaptation to market changes. Additionally, recent laws mandating payments to MSMEs within 45 days and rising logistics costs further exacerbated the crisis.

Industry experts are calling for targeted support policies, improved credit access, and subsidized logistics to revive the sector.