Ludhiana: The industrial sector in Ludhiana is grappling with severe disruptions as the deteriorating situation in West Asia impacts global logistics and trade. Exporters report canceled shipments, rising insurance costs, and the forced rerouting of vessels through longer passages, such as the Cape of Good Hope, to avoid high-risk zones like the Red Sea and the Persian Gulf.Upkar Singh Ahuja, President of the Chamber of Industrial & Commercial Undertakings (CICU), described the situation as alarming, noting a “cascading impact” on India’s export-oriented clusters. The conflict has choked the Strait of Hormuz—a vital artery for 20% of global crude and energy—and disrupted major hubs like Jebel Ali, which serves as a critical distribution center for Indian garments, yarns, and auto components.Policy Contradictions and Financial StressIn response, CICU has submitted an urgent representation to the Ministries of Finance, Commerce and Industry, and Textiles. The industry is seeking an immediate exemption from Section 43B (h) of the Income Tax Act.Industry leaders point to a significant policy contradiction:Income Tax Mandate: Section 43B (h) requires payments to domestic MSME suppliers within 45 days.FEMA Guidelines: Under the Foreign Exchange Management Act, exporters are allowed up to 15 months to realize export proceeds.Ahuja argued that with shipping delays and stretched payment cycles, the 45-day mandate has become unviable. “This creates a severe liquidity gap,” he stated, warning that MSME exporters face critical financial stress that could damage output and employment.Vulnerable Sectors and Stranded TradersThe MSME-driven textile and engineering clusters in Punjab are particularly vulnerable due to their price sensitivity and reliance on predictable shipping cycles. SC Ralhan, President of the Federation of Indian Export Organizations (FIEO), confirmed that a large number of orders have been canceled and logistics costs are soaring.The crisis has also taken a personal toll; Ralhan noted that several exporters on business trips to the Middle East are currently stranded and running out of funds. They have been advised to stay updated as the situation evolves.CICU General Secretary Honey Sethi emphasized that the survival of these clusters depends on “responsive and pragmatic policy interventions” to ensure industrial growth remains uninterrupted during international crises.
