US Tariffs Impact on Indian MSMEs 2025
The year 2025 has brought a fresh wave of uncertainty for Indian exporters as the United States imposed 50% tariffs on Indian goods, including a 25% penalty linked to Russian trade. For India’s 6.44 crore MSMEs employing nearly 27 crore people, this move is reshaping export economics and forcing businesses to rethink global strategies.
In today’s changing landscape, Section 232 tariffs have significantly affected sectors like copper, steel, aluminium, and automobiles, shaping pricing dynamics and competitiveness. As a result, India is now more exposed to external trade pressures, highlighting the need to rethink trade strategies and strengthen sectoral resilience.
The Impact: Pressure on Margins and Exports
MSMEs in textiles, chemicals, auto components, and gems & jewelry are among the worst hit. For many, this tariff spike has made Indian products non‑competitive in the US market, shrinking profit margins and disrupting long‑standing supply chains.
The ripple effect extends beyond exports. The Finance Ministry and RBI are reviewing the fallout as industry bodies warn of potential stress in MUDRA loans and NPAs linked to these sectors. With higher input costs and shipment delays, small manufacturers face the hard choice between raising prices or losing market share.
The Broader Picture: Global Slowdown, Local Strength
According to the IMF, global growth could slow to 3.2% in 2025, but India remains resilient with a projected 6.6% GDP growth, showing the underlying strength of the domestic economy. While tariffs have dragged down exports to the US—the largest market for Indian goods—new trade routes and regional partnerships are cushioning the blow.
What the Future Holds
Economists describe this as an inflection point rather than a collapse. India is recalibrating its trade policies toward ASEAN nations, the Middle East, and Europe, where tariffs are significantly lower. MSMEs are expected to pivot towards “China+1” and “US‑minus” trade strategies, leveraging free trade agreements and digital commerce platforms to penetrate new markets.
How MSMEs Can Expand Beyond the US
Adapting to the new reality means thinking global in smarter ways:
- Explore untapped markets in Southeast Asia, Africa, and the EU using trade pacts that reduce tariffs.
- Digital-first exporting – Launch multilingual e-commerce sites, list on Amazon Global and Alibaba, and leverage SEO to attract overseas buyers.
- Build sustainable credibility – Obtain international certifications (like ISO and FDA) to meet global compliance standards.
- Leverage India’s diaspora and storytelling – Promote the heritage and craftsmanship of your brand through online storytelling, influencer tie‑ups, and sustainability branding.
Navigating Growth with Financial Support
Amid tariff turbulence, liquidity becomes key. Businesses looking to diversify exports or invest in new supply chains need flexible, fast‑disbursing financing. This is where structured MSME and business loans can make expansion possible—not just survival.
At Red Fort Capital, we partner with entrepreneurs to fuel this transition—offering tailored business loans that enable Indian MSMEs to reimagine global growth despite trade headwinds.
So, if your business is ready to explore newer markets or scale operations beyond US shores,
apply for a Business Loan with Red Fort Capital today and take your next global step with confidence.
About Red Fort Capital
Red Fort Capital is dedicated to empowering Indian MSMEs (Micro, Small, and Medium Enterprises) on their path to business growth through customized business loans. We understand that securing a business loan in India can pose significant challenges, particularly when factors like a less-than-ideal credit score, a relatively short business history, unclear financial records, or variable cash flow come into play.
As a respected Non-Banking Financial Company (NBFC), we take pride in offering a diverse range of secured business loans, spanning from 1 to 10 Crores. What sets us apart is our remarkable ability to disburse funds fast, in just 7 days. Our financial solutions are meticulously designed to cater to a spectrum of needs, including working capital requirements, equipment and machinery purchases, invoice/bill discounting, and last-mile financing, among others.
