Ludhiana: CICU warns global conflict could hit MSMEs, spike raw material costs

CICU highlighted the risk of a surge in petrochemical-based inputs, including plastic raw materials, with prices potentially rising by up to 60 per cent if supply routes remain disrupted or crude oil costs climb.

The Chamber of Industrial and Commercial Undertakings (CICU) on Tuesday warned that escalating tensions between Israel and Iran could severely disrupt global supply chains, posing a serious threat to India’s Micro, Small and Medium Enterprises (MSMEs). Manufacturing units, particularly in industrial hubs like Ludhiana, are likely to face shortages of imported raw materials and steep cost increases.

CICU president Upkar Singh Ahuja said the chamber has urged the government to secure alternative raw material sources. (HT Photo)

CICU highlighted the risk of a surge in petrochemical-based inputs, including plastic raw materials, with prices potentially rising by up to 60 per cent if supply routes remain disrupted or crude oil costs climb. Industrial gases such as oxygen, argon, and acetylene, crucial for welding, fabrication, and metal processing, could also become scarce, affecting production lines, delaying deliveries, and increasing operational costs for steel, engineering, and automotive units.

The chamber further pointed to broader economic risks, including rising freight and shipping costs, disruptions in Middle Eastern maritime trade, and currency volatility, which could impact MSME exporters to Europe, Africa, and the Middle East.

CICU president Upkar Singh Ahuja said the chamber has urged the government to secure alternative raw material sources, ensure uninterrupted industrial gas supply, and monitor price spikes. “MSMEs are still recovering from pandemic-induced disruptions. Any further global shock could severely affect production, employment, and the industrial ecosystem,” he said.