US, EU slowdown to cripple 20% of small bizs

Small businesses, which per cent of exports, will face headwinds from the imminent economic slowdown in advanced countries, particularly the US and Eurozone, according to a report.

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According to a Crisil analysis, one in five MSMEs will also see stretched working capital. The US and EU markets account for a third of the country's overall exports. The analysis shows a fifth of the micro, small and medium enterprise (MSME) sector by value is likely to witness an increase in working capital requirement this fiscal compared to the pre-pandemic levels. These MSMEs in different sectors- dyes and pigment, gems and jewellery, and construction are already grappling with high working capital requirements.

The analysis covers 69 sectors and 147 clusters, which constitute two-thirds of the MSME universe, logging in aggregate revenue of Rs 63 lakh crore, representing around a quarter of the gross domestic product last fiscal.