Chennai, Oct. 9 -- Micro, Small and Medium Enterprises (MSMEs) in Tamil Nadu have raised concerns over the Reserve Bank of India's (RBI) 25-basis-point repo rate hike to 5.50 per cent, warning that higher borrowing costs could strain cash flows, delay investments and weaken export competitiveness.

M Jayabal, state general secretary, Tamil Nadu All Entrepreneurs Federation, said higher industrial lending rates could undermine manufacturers' ability to compete with China and the US in global markets.

S Surulivel, coordinator, Federation of Coimbatore Industrial Associations (FOCIA), said industrial loans were already carrying interest rates of around 10 per cent, adding that a further increase could slow industrial growth.

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