ET Make in India SME Regional Summits: IDBI Bank champions West Bengal MSMEs

At the ET Make in India SME Regional Summit in Kolkata, Nagaraj Garla, Executive Director of IDBI Bank, offered a candid and insightful perspective on the challenges and opportunities facing Indian micro, small, and medium enterprises amid global trade tensions and economic uncertainties.

This edition of the ET SME Summits series, held on September 4, had IDBI as banking and lending partner, Canon as tech enabler, and Audi as gold partner.

Resilience in the face of uncertainties

With the US accounting for around 20% of India’s exports, and MSMEs contributing nearly half of the country’s total export basket, the current trade disruptions are impossible to ignore. In his fireside chat, ‘Catalysing Make in India Growth: IDBI Bank's Strategic Imperatives for Empowering MSMEs’, Garla acknowledged the reality of concentration risk in the export sector.

“If someone says there will be no impact, that’s not accurate,” he said. Yet, he stressed resilience and adaptability, recalling how businesses managed the Covid-19 crisis as a precedent for overcoming present challenges.

The government’s proactive strategy to diversify trade partners, involving talks with some 40 countries, sets a hopeful outlook for stabilisation within the next 12-18 months. From a banking standpoint, although direct export credit is only 1% of total exposure, potential ripple effects on up to 10% of bank loans mean risk frameworks are being recalibrated.

“We’re not stopping lending,” Garla emphasised at the ET SME Summit. “But we will ask more questions and make better-informed decisions, especially around US exposure.”

While asset quality is not expected to suffer drastically, short-term credit growth and earnings could see some impact. However, the Indian banking sector’s resilience, paired with a determined entrepreneurial spirit, will turn crises into opportunities once again.

Garla underscored the vital role banks play beyond merely lending money. The Centre is actively promoting the diversification of export markets, supported by multiple schemes or platforms. Banks are facilitating MSMEs to enhance competitiveness by encouraging innovations such as adopting solar energy to drastically cut costs. “Many MSMEs have recovered their solar investments within 24 to 36 months,” Garla highlighted, adding that such transformations help offset tariff pressures and improve global standing.

Digital world, human touch
On the delicate balance between technology and relationship banking, Garla spoke about IDBI Bank’s “phygital” approach: integrating digital tools with personalised human engagement. While up to 90% of loans under ₹1 crore are processed digitally, larger loans see progressively greater human oversight, ensuring speed without sacrificing judgment or support.

“Our branches and relationship managers remain integral. Technology accelerates, but it doesn’t replace human empathy and understanding,” he underlined.

West Bengal’s MSME ecosystem: Where tradition meets innovation
Recognising West Bengal’s unique strengths, with nearly nine million MSMEs operating across 548 product clusters, Garla spoke about the state’s impressive record of women-led enterprises: 36% are promoted by women, and 23% are fully women-led. IDBI Bank offers tailored products for traditional sectors like jute and tea, alongside modern financing solutions for newer industries and startups. Notably, under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, IDBI provides collateral-free funding up to ₹20 crore, making it easier for startups and innovators to access capital.

In partnership with rating agencies, IDBI Bank is also crafting hyper-personalised credit products for MSME clusters, moving away from generic financing to solutions shaped by each cluster’s distinct needs. “We visit the clusters, understand their dynamics, and deliver credit faster and more effectively,” Garla explained.

Going ahead, IDBI Bank plans to triple its MSME credit exposure in West Bengal over the next three years, reflecting its commitment to the state’s economic potential. With a rich blend of tradition, a skilled workforce, and a burgeoning startup ecosystem, West Bengal is poised to play a pivotal role in India’s ambition to become a $5 trillion economy.

“MSMEs are a top priority,” Garla concluded at the ET Make in India SME Regional Summit - Kolkata. “We’re driving awareness and credit flow to empower enterprises of all sizes, from ₹10 lakh to ₹100 crore, especially those with strong business models, even without collateral.”

Given the current global context, IDBI Bank’s strategic blend of cautious risk management, technology-enabled efficiency, and deep-rooted relationship banking offers MSMEs in West Bengal, and across east India, a roadmap to resilience, growth, and competitiveness.

The ET Make in India SME Regional Summits, ET MSME Day, and ET MSME Awards are flagship initiatives to celebrate the versatility and success of India’s MSME sector. If you lead or are part of a micro, small, or medium enterprise, register for the ET MSME Awards 2025 before October 15, 2025.