With the west Asia war continuing and fuel prices increasing across India, cost of several inputs has increased for the engineering sector and the Micro, Small, and Medium-scale Enterprises (MSMEs) in Coimbatore.

According to M. Karthikeyan, president of the Coimbatore District Small Industries Association (CODISSIA), the MSMEs are currently operating at just 50% capacity and may see capacity utilisation picking up soon. They were operating 70% of the capacity a couple of months ago. Industries that were exporting to or through the west Asian countries had no option but to pay high demurrage charges because of the war there. The increasing input costs have created a financial stress for industries. The government should implement the Emergency Credit Line Guarantee Scheme at the earliest, he added.

C. Sivakumar, president of the Coimbatore Tiruppur Micro and Cottage Entrepreneurs Association, said prices of ferrous and non ferrous items, including copper, aluminium and steel went up from February and are almost double the cost now. There are several types of oils that are used in industries and not only have the cost of these risen but there are availability problems too. “If we want 200 litres of oil, we get only 20 litres,” he said. And, the cost of oil that was ₹290 a litre is now almost Rs. 320, he added.

However, the industries are managing as the demand growth remains flat. It has neither dipped nor risen. Almost all the units are facing manpower shortage and have reduced production. Many units do not want to go in for loans or take up financial risks at this stage. The industries are yet to see the impact of hike in transport costs, the industry representatives added.