The multifaceted impact of the COVID-19 pandemic on the Indian economy has been profound and interconnected, spanning disruptions in the manufacturing sector, negative repercussions on economic growth, a significant contraction in international trade, and a devastating toll on the Micro, Small, and Medium Enterprises (MSME) sector. In the manufacturing arena, supply chain disruptions, labour shortages, and reduced demand led to a substantial decline initially, followed by a phased recovery as lockdown restrictions eased. Economic indicators, including Gross Value Added (GVA), GDP, NDP, and NNI, reflected a stark negative impact on growth, prompting the government to advocate for counter-cyclical fiscal measures and a departure from fiscal rules to address the economic fallout. International trade faced notable contractions in both exports and imports, particularly in sectors such as mineral oils, gems and jewellery, and machinery, highlighting vulnerabilities in global supply chains and necessitating adaptive policy measures. A state-wise analysis illuminated the devastating impact on MSMEs in Maharashtra, Tamil Nadu, and Uttar Pradesh, revealing closures, labour issues, disrupted supply chains, and financial stress. The recommended policies aim to address these challenges comprehensively, advocating for targeted support, financial incentives, and measures to reignite economic activities, particularly in the worst-affected sectors. The crucial role of the MSME sector is underscored, emphasizing the need for financial incentives and holistic recovery efforts that involve collaborative initiatives from the government, industry, civil society, and other stakeholders. These policy interventions collectively aim to navigate the complexities of the post-pandemic economic landscape and ensure a resilient recovery for the Indian economy.