There is a sound every small manufacturer dreads. Not a machine breaking down, because that can be planned for. It is a CNC line going silent mid-cycle. A moulding batch lost to a voltage dip that lasted less than a second. A heat-treatment run ruined. A die damaged. For a large plant, that may be an inconvenience. For an MSME, it can mean losing an entire day's output. The cost lands in rejected products, idle labour, delayed dispatches and difficult conversations with customers who expect reliability and have little patience for excuses. That is why, on MSME Day, perhaps the most important question is not how much power India has added, but whether that power reaches factory floors when production lines need to run.
The question matters because MSMEs are not a side story in India's manufacturing journey; they are its foundation. India's 63 million MSMEs contribute more than 36 percent of manufacturing output, account for nearly 45 percent of exports and support over 110 million jobs. They form the supplier networks behind the country's automotive, engineering, electronics and industrial sectors. Every ambition around Make in India, every effort to attract global supply chains and every vision of India as a manufacturing powerhouse ultimately depends on whether these businesses can remain competitive. And competitiveness, at its most basic level, begins with whether the lights stay on.
India deserves credit for the progress it has made in expanding power generation and accelerating renewable energy adoption. By mid-2025, the country had crossed a landmark threshold: over 50 percent of installed electricity capacity now comes from non-fossil sources, reaching that milestone roughly five years ahead of its 2030 Paris commitment. The National Electricity Plan 2023 charts an ambitious path forward, targeting a renewable share of around 57 percent by 2026–27 and 66 percent by 2031–32. These are significant achievements, and they demonstrate that India can build energy infrastructure at scale. Yet manufacturers do not consume installed capacity; they consume reliable power. A factory does not become more productive because another gigawatt has been added to the grid. It becomes more productive when machines run without interruption, production schedules hold and quality remains consistent. Over the last five years, India has met roughly 80 percent of its transmission targets. That 20 percent gap is not a planning statistic. For the MSME at the end of an overloaded feeder, it is the difference between a productive shift and a wasted one.
As renewable capacity grows, the challenge is no longer limited to generation. Power must be transmitted, absorbed and delivered where economic value is actually created. China's recent experience is worth studying closely. Having added more renewable capacity in a single year than most countries have ever built, China found itself in early 2026 curtailing significant volumes of solar and wind because the grid could not absorb it. The outcome was counterintuitive: emissions rose and coal generation climbed, because when renewable supply could not be firmed up, the system fell back on fossil fuels. Generation alone does not create reliability. Without adequate transmission, storage and flexible capacity, even abundant power can struggle to reach users when they need it most.
For India's MSMEs, this is not an abstract energy-sector debate. The sector generates roughly Rs 29 lakh crore in annual output, yet the cost of unreliable power rarely appears in official statistics. It is hidden in rejected batches, equipment stress, lower yields, unplanned maintenance and missed delivery schedules. Most businesses negotiate hard on tariffs, but far fewer calculate the true cost of disruption. In practice, a single unplanned outage can cost a manufacturing unit far more than a month of higher electricity bills. The tariff is visible. The disruption is not. But it is the disruption that quietly erodes margins, competitiveness and growth.
Over the years, I have seen manufacturers improve profitability not by changing products or expanding capacity, but simply by improving the quality and consistency of their power supply. Injection moulding units report better yields and fewer losses. Precision manufacturers, particularly those supplying Japanese electronics companies, see lower rejection rates and longer component life when power is clean and stable. Production becomes more predictable. Customers become easier to retain. Reliable power does more than keep the lights on. It protects equipment, reduces waste and quietly determines whether a supplier holds an OEM account or loses it.
This is also where the conversation around sustainability needs greater nuance. Reliable energy and cleaner energy are not competing objectives. Renewable power will remain central to India's growth story, but renewables deliver their full value only when supported by infrastructure that allows them to perform consistently. Storage systems, hydro power, gas-based generation and other dispatchable resources are not alternatives to the transition. They are what make the transition work. The opportunity to invest in this supporting infrastructure exists today. What is needed is the policy urgency to match it.
The conversation therefore needs to move beyond capacity targets alone. Generation, transmission and distribution cannot be treated as separate scoreboards. A megawatt generated but not delivered creates little value. The real measure of success is whether power reaches businesses in a form they can depend on. That means building transmission alongside generation, accelerating storage deployment, preserving the flexible capacity needed to balance the grid and strengthening the distribution networks that connect power to industry. These are not aspirational goals. They are the unglamorous, essential work that determines whether India's energy ambitions translate into manufacturing competitiveness.
For policymakers, reliability must be planned alongside capacity. For utilities, flexibility and network quality are no longer optional investments. For business owners, my advice is direct: do not wait for the grid to catch up. Treat energy as a strategic input, not just a utility expense. Build a balanced portfolio, pair whatever renewables you can access with firm dispatchable backup, and cost your power on the full bill including rejects, downtime and missed dispatches, not the tariff line alone. The manufacturers who understand this will outcompete those who do not.
On MSME Day, India rightly celebrates the 110 million people whose livelihoods depend on small manufacturing holding its ground and growing. The pledge worth making today is a concrete one; build the transmission, invest in storage, protect the dispatchable backbone of the grid, and fix the last mile. MSMEs did not build this economy by waiting for conditions to improve. They built it in spite of them. The least we owe them is an energy system that finally works as hard as they do.
The author is CEO, Caparo Power Limited.
