Double blow to SMEs, exports dry up as input prices increase

“Survival of the units depend on completing tasks so we pull out all the stops to get it done,” he said, adding that this year, the economic slowdown had cast a shadow on the sector with around 25 to 30 per cent less work than 2018-19 fiscal’s last quarter.

Another worry for the sector is that exports are down almost by 7 to 8 per cent year-on-year. If that was not enough, the pandemic has severely affected the supply chain of the sector. Prices of raw material such as sheet plate, stainless steel and copper, used in manufacturing of automobile components, have risen sharply by at least 10 to 15 per cent in the last few days. Other than this, electrical components such as wiring systems, harness equipment and lighting systems have completely dried out in the markets.

“Our dependency on China for supply of this material is almost 100 per cent. Due to scale and technology, they had cornered a majority share of the world market. Now as supplies from China are drying out, we are struggling to get raw material,” he said.

Belsare also said Indian companies who manufactured these materials had unable to scale up operations to meet the demand. “There are few companies in India who had ventured into this segment but their capacity is too low to meet the demand,” he added.

Given the price parity China enjoys due to size and scale of its business, most Indian companies have refrained from investing in this sector that has resulted in the crisis now.

The small and medium industries employ around four to five lakh people in Pimpri-Chinchwad. Acting as vendors for automobile OEMs, these industries are largely responsible for the growth in this area in many ways. However, the slowdown in the automobile sector has adversely affected them with many units closing down.