According to a report by Crisil Intelligence, Micro, Small and Medium Enterprises (MSMEs) of India, which operate about 45% of the country’s exports, are facing serious challenges due to the new American tariffs. The US, which is currently levying 25% of Indian goods, will impose another tariff of 25% from August 27, which will make the total tariff to 50%. This growth will be the most affected by textile, gems and jewelery, and chemical sector MSMEs, the areas that are 25% of the exports of India to the US.
Fabrics, especially Tiruppur’s readymade garments (RMG), which contribute more than 30% to India’s RMG exports, will cost 61%, while competitors such as Bangladesh and Vietnam are 31%. Crisil Intelligence Director Pushish Sharma said that this could reduce competitiveness and reduce lower margins already. The gems and jewelery sectors, which have 80% export stake of diamond polisters in Surat, are also unsafe, as diamonds make more than 50% of India’s jewelery exports, with the US almost one -third.
The chemical industry, where MSME has a 40% stake, is facing strict competition from Japan and South Korea, which benefit from low tariffs. Auto component MSMEs, especially gearboxes and transmission equipment MSMEs may also have to struggle, although their American risk is limited to 3.5% of India’s production. Overall, tariffs are threatened with $ 19 billion exports to cloth, chemicals, seafood and auto components.
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