Budget 2026: Credit Support Essential for MSME Exports; Deloitte Pursues Funding for Critical Minerals
Deloitte India has called on the government to leverage the upcoming FY27 Budget to enhance the resilience of India’s trade sector. The firm emphasizes the need for expanded export credit and concessional financing for micro, small, and medium enterprises (MSMEs), which play a crucial role in the economy. With MSMEs accounting for approximately 46% of the country’s exports and being the second-largest employer after agriculture, Deloitte argues that easing financial and compliance pressures will help these businesses navigate global uncertainties and maintain competitiveness in international markets.
Strengthening MSMEs for Economic Growth
Deloitte highlights the importance of MSMEs in driving inclusive economic growth and safeguarding jobs. The firm notes that these enterprises contribute significantly to rural incomes and are pivotal to India’s ambition of becoming a global manufacturing hub. To support MSMEs, Deloitte recommends simplifying digital processes to alleviate compliance burdens and implementing comprehensive training programs aimed at enhancing competitiveness. The firm also advocates for targeted export incentives and improved duty drawbacks for sectors like ready-made garments, gems and jewelry, and leather, which are particularly vulnerable to changing global trade dynamics.
Addressing Global Trade Challenges
Deloitte economist Rumki Majumdar points out that rising global protectionism and unpredictable measures, such as tariff increases and changes in rules of origin, are creating uncertainty for Indian exporters. Although the immediate impact of these trade frictions on GDP growth may be limited, the potential repercussions for MSMEs and employment could be substantial. Majumdar emphasizes that MSMEs contribute 30.1% to India’s GDP, account for nearly 46% of exports, and employ around 290 million people. Disruptions in export markets or stricter trade regulations pose significant risks to job stability and income security.
Securing Resource Access and Collaboration
In terms of resource security, Deloitte advocates for the establishment of a dedicated critical minerals fund to facilitate overseas acquisitions and technology partnerships. The firm calls for increased investment in domestic exploration, extraction, and processing of essential minerals such as lithium, cobalt, and rare earth elements. Furthermore, Deloitte encourages deeper global collaboration with regions like Africa, Australia, and Latin America to secure upstream access and foster joint research and development in mineral processing and recycling.
Investing in Renewable Energy
Deloitte also emphasizes the importance of investing in renewable energy, green hydrogen, and grid-scale storage solutions. These initiatives are seen as vital for reducing external vulnerabilities and supporting India’s long-term transition to clean energy. By prioritizing these investments, the government can not only enhance energy security but also contribute to sustainable economic growth, aligning with global trends towards greener technologies.
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