India-US Tariff Dispute Intensifies Amid MSMEs’ Concerns
India-US Tariff Dispute Deepens: 55% of Indian Exports Face 25% Reciprocal Duty
The ongoing India-US Tariff Dispute has taken a sharper turn, with about 55% of India’s total merchandise exports to the United States now set to face a 25% reciprocal tariff. Minister of State for Finance Pankaj Chaudhary confirmed the move in a written reply to the Lok Sabha, stating that the government remains committed to safeguarding the interests of farmers, exporters, MSMEs, and entrepreneurs.
“We will take every necessary step to secure our national interest,” Chaudhary said, emphasising that trade retaliation is aimed at ensuring a level playing field for Indian businesses in global markets.
India-US Tariff Dispute: Rajnath Singh’s Veiled Swipe at Trump
The announcement comes days after Defence Minister Rajnath Singh took a thinly veiled jab at US President Donald Trump over Washington’s steep 50% tariffs on Indian goods. Speaking in Madhya Pradesh, Singh said, “There are some people who are jealous of India’s rapid development… They think, ‘we are the boss of all.’ They cannot accept how quickly India is moving ahead.” He accused some global powers of trying to erode the competitiveness of Indian-made products.
Punitive Tariffs Tied to Russia Sanctions
The US’s tariff decision – which imposes 50% duties on Indian goods – is partly in retaliation for India’s purchase of Russian oil.
Half of the duties have been described by Washington as “punishment” linked to the Ukraine war. Trump, ruling out trade negotiations until tariffs are resolved, said on Thursday, “No, not until we get it resolved,” when asked about future talks with India.
The US has also maintained tariffs on steel, aluminium, and related derivatives from India since June, prompting New Delhi to explore countermeasures. Sources suggest India may soon announce a matching tariff package targeting American goods.
India-US Tariff Dispute: Trump’s Broader Justification
Defending his trade strategy, Trump claimed the tariffs have given the US “great power over enemies” and credited them for resolving long-standing international disputes, citing conflicts between Pakistan and India, as well as Azerbaijan and Armenia.
Fisheries Sector Sees Opportunity
While most exporters are concerned, Maharashtra Fisheries Minister Nitesh Rane urged stakeholders to view the shrimp tariff hike as a chance to strengthen India’s domestic seafood market. “Europe and Vietnam are strong alternative markets for Indian shrimp,” Rane noted, adding that the domestic market is large enough to support fishermen and farmers.
Government Support for MSMEs
To cushion the blow, the finance ministry is working on a credit guarantee scheme for small businesses and exporters affected by the India-US Tariff Dispute. According to government sources, banks may soon receive 10–15% credit guarantees for loans overdue by up to 90 days, covering enterprises with turnover up to ₹5 billion that fall under the RBI’s special mention accounts category.
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