Impact of US Tariffs on India's MSME Export Sector

The Federation of Indian Export Organisations expresses deep concern over potential US reciprocal tariffs, which could adversely affect India's MSME exports. President SC Ralhan emphasizes the need for government support to mitigate impacts. Some sectors may experience reduced demand in the US market due to rising import duties.

The Federation of Indian Export Organisations has raised alarms about the potential impact of reciprocal tariffs by the United States on Indian exports, particularly those made by micro, small, and medium enterprises (MSMEs). President SC Ralhan addressed concerns on Wednesday, highlighting the severe repercussions such tariffs could inflict on trade in the short term.

Ralhan urged the Indian government to intervene and provide exporters with the necessary support to navigate these challenges. He commented that tariffs around 10 percent might be manageable, but anything beyond that could prove detrimental, especially as India and the US negotiate a bilateral trade agreement. The pending tariffs have already led to a halt in orders as American buyers remain wary amid escalating uncertainty.

Goods spanning various sectors, from agriculture to engineering, face potential setbacks with the imposition of these tariffs. The scheduled tariff announcements, referred to as a 'Liberation Day' by US President Donald Trump, are expected to reveal their impact in early 2025. Concerns about production cuts, layoffs, and decreased profit margins loom, with trade figures for 2024-25 anticipated to maintain a similar trajectory as the previous fiscal year.

(With inputs from agencies.)