The new 50% U.S. tariffs will significantly impact India’s Micro, Small, and Medium Enterprises (MSMEs), which account for 45% of the country’s total exports. The tariffs, effective from August 27, will particularly hurt the textiles, gems and jewelry, and seafood industries, as MSMEs have more than a 70% share in these sectors. According to Crisil Intelligence, the chemical sector, where MSMEs have a 40% share, will also feel the heat.
Pushan Sharma, Director at Crisil Intelligence, stated that the partial absorption of higher prices will squeeze the already slim margins of MSMEs and challenge their competitiveness. The article highlights that MSMEs in Surat, which dominate diamond exports, will be severely affected, as the U.S. accounts for nearly a third of these exports. The seafood sector will also be disadvantaged due to competition from countries like Ecuador, which faces a much lower tariff.