Ludhiana, January 10
Trade ties between India and the United States have come under renewed pressure in recent months, particularly after former US President Donald Trump announced a proposal to impose extremely high tariffs on certain countries. Following indications of a 500 per cent tariff on Indian goods, a large number of American importers have reportedly withdrawn or cancelled their orders from Indian exporters, creating uncertainty across export-oriented industries. Making these remarks in a statement issued here today, the President of the World MSME Forum Badish Jindal emphasized that the American market holds strategic importance for India.
Jindal remarked, “Merchandise exports from India to the US are estimated at around ₹7 lakh crore, forming nearly 18 per cent of India’s total goods exports. In addition, software and IT service exports to the US stand at approximately ₹16 lakh crore, accounting for nearly 55 per cent of India’s total software exports. So, India has no other option then to compromise with USA, failing which India will have to face the worst economic crises.” The World MSME Forum president further stated that the situation has become increasingly worrying due to the aggressive trade posture adopted by the United States at the global level.
The Forum noted that a bill seeking bipartisan approval in the US Congress proposes steep tariff measures against countries including India and China. The proposed legislation, referred to as the “Sanctioning Russia Act of 2025,” is being viewed as a pressure mechanism aimed at forcing countries to discontinue the purchase of Russian crude oil. According to the World MSME Forum, even when the United States had earlier imposed a 50 per cent tariff, India’s exports to the US showed resilience and recorded a 22.6 per cent growth in November 2025. However, the Forum warned that the proposed 500 percent tariff would fundamentally alter the trade environment and could leave little room for the continuation of India–US commercial engagement. Under such conditions, India may be
compelled to make significant adjustments in its energy procurement strategy in order to sustain access to the US market.
The impact of the proposed bill on China, however, may be relatively limited. The Forum observed that China’s dominance in sectors such as rare earth minerals and electronics gives it significant leverage in US markets. Due to America’s dependence on Chinese supply chains, some tariff relaxation for China cannot be ruled out. In contrast, recent public remarks by the US leadership targeting India suggest a tougher approach toward New Delhi.
The World MSME Forum also highlighted growing anxiety among US importers. Many buyers are now attaching clauses to contracts stating that goods will not be accepted if India becomes subject to a 500 percent tariff. Given that export cycles typically take six to eight weeks, Indian exporters are hesitant to accept such conditional orders, as sudden tariff changes during transit could result in substantial financial losses.
In light of these developments, the World MSME Forum has urged the Government of India to initiate immediate discussions with Washington. In a communication addressed to the Prime Minister, the Forum warned that losing access to the US market could place severe strain on India’s economy. India’s total exports to the United States are estimated at nearly ₹23 lakh crore, representing about 36 percent of the country’s overall exports, and any disruption could significantly distort the trade balance.
The Forum further stated that the economic benefits of importing discounted Russian oil are currently being realized by a limited number of large corporations, while consumers continue to face high fuel prices. In view of the potential trade fallout, the Forum stressed the need for a pragmatic reassessment of energy and trade priorities to safeguard India’s long-term economic interests.
