Ludhiana, February 3
The World MSME Forum has welcomed the newly proposed India-USA trade agreement, under which reciprocal tariffs on Indian goods exported to the United States are proposed to be brought down to an effective level of 18 per cent. The Forum termed this move as a major relief for Indian exporters, particularly MSMEs, who have been under severe pressure due to the earlier tariff burden of up to 56 per cent imposed by the U.S. on several Indian product categories.
In a statement issued here today, President of World MSME Forum Badish Jinsaid said, “Over the past period, Indian exporters faced serious challenges as elevated U.S. tariffs touching 56 per cent in certain product lines sharply eroded price competitiveness of Indian goods. This led to loss of export orders, margin compression, shift of US buyers towards competing countries, stress on labour-intensive MSME sectors such as textiles, gems & jewellery, engineering goods and marine products.”
Pointing out that high tariff regime has made Indian products significantly costlier in the US market despite their quality and reliability, Jindal further said that United States is India’s largest export destination, accounting for nearly 18 per cent of India’s total merchandise exports. In FY 2024-25, India’s exports to the USA stood at approximately USD 86.5 billion, underlining the strategic importance of the U.S. market for Indian industry and MSMEs.”
Jindal added that the 10 export products from India to the United States, which will directly benefit from tariff rationalisation under the proposed agreement include electrical & electronic equipment approx. USD 15.9 billion, gems & jewellery (Pearls, Precious Stones & Metals) approx. USD 9.97 billion, pharmaceutical products approx. USD 9.78 billion, machinery & mechanical appliances approx. USD 6.69 billion, mineral fuels & petroleum products approx. USD 4.2 billion, iron & steel articles and metal products approx. USD 2.7 billion, textiles & apparel (Garments and Fabrics) approx. USD 2.5-2.8 billion, organic chemicals approx. USD 2.55 billion, automobiles & auto components (Non-Railway Vehicles) approx. USD 2.58 billion and marine & seafood products approx. USD 1.9 billion.
“These sectors are largely MSME-driven, employment-intensive and spread across major industrial clusters in Punjab, Gujarat, Maharashtra, Tamil Nadu, Uttar Pradesh and other stales”, said Jindal. World MSME Forum has highlighted that the proposed 18 per cent tariff structure will restore price competitiveness of Indian goods in the US market, due to lower tariff the Indian Exporters can easily compete China and Bangladesh in US, help regain lost export orders, encourage long-term sourcing contracts from US buyers, support employment generation in MSME clusters and strengthen India’s position as a reliable global supply-chain partner”, informed Jindal.
“The proposed reduction of tariffs to 18 per cent is a game-changer for Indian exporters. MSMES were bearing the brunt of the 56 per cent tariff regime, which severely impacted competitiveness and order flows. This agreement opens fresh opportunities, restores confidence among US buyers and will significantly boost India’s export growth,”, added Jindal.
Jindal futher said that World MSME Forum expects this agreement to revive stressed export sectors, attract new investments and deepen India USA economic cooperation in the coming year. The World MSME Forum has urged for a swift operationalisation of the agreement and continued engagement with stakeholders to ensure maximum benefit for Indian exporters. The Forum reaffirmed its commitment to working with the Government and industry bodies to help MSMEs leverage the full potential of the US market.
