New Delhi, June 3 (IANS) The engineering exports promotion body, EEPC India, on Wednesday proposed to the government a separate rating system for micro, small and medium enterprises to reflect their size and operational nature.

The separate rating procedure would give due recognition to Indian MSMEs, enable them to access funds at reasonable rates, and improve their competitiveness in the global market.

EEPC India noted that many MSMEs struggle to secure investment‑grade or higher ratings from external rating agencies because they are benchmarked against industry leaders rather than peers.

“As a consequence of having a sub-investment grade rating, MSMEs find it pretty tough to get loans from banks, as they need to pay much higher collateral than those with an investment grade rating,” Pankaj Chadha, Chairman, EEPC India, said in a letter to the Ministry of MSME.

The statement cited the example from the steel sector where small MSME units are compared with giants such as JSW or Tata Steel.

“Now, to ensure a fair competition, it is recommended that the RBI should develop a completely separate system for rating MSMEs only, and these MSME units must be benchmarked against their peers who belong to the same bandwidth,” Chadha noted.

In this regard, RBI may also need to set separate parameters dedicated to MSME by taking into account their size and the peculiar nature of their operation.

The MSME sector forms the backbone of the Indian economy, contributing nearly one-third of manufacturing output and accounting for about 45 per cent of merchandise exports.

India’s micro, small and medium enterprises remained resilient despite global geopolitical uncertainties, and credit exposure rose to about Rs 46 lakh crore in April 2026, a recent report from credit bureau CRIF High Mark said.

MSMEs’ resilience is supported by strong domestic demand, policy support, and diversified credit participation.

The overall credit exposure in the sector rose 12.8 per cent year‑on‑year, supported by asset‑quality gains and diversified geographic and sectoral participation.

—IANS

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